In: Economics
What is an expansion? What is a contraction?
The economic exapnsion occurs when there is an overall increase in the economic activity. The economic growth takes place in this period and there is a rise in the real gross domestic product when there is economic expansion.
The economic contraction occurs when there is a decline in the overall economic activity. There is a fall in the real output. There is also a fall in the industrial production, sales and personal income and there is a rise in the unemployment rate.