Expansion

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DEFINITION of 'Expansion'

The phase of the business cycle when the economy moves from a trough to a peak. It is a period when business activity surges and gross domestic product expands until it reaches a peak.

Also known as an "economic recovery."

BREAKING DOWN 'Expansion'

An expansion is one of two basic business cycle phases. The other is contraction. The transition from expansion to contraction is termed a "peak" and the changeover from contraction to expansion is a trough. Expansions last on average about three to four years but have been known to last anywhere from 12 months to more than 10 years. Much of the 60s was a time of expansion which lasted almost nine years.

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