There are four phases of the business cycle, the expansion, the peak, the contraction, and the trough. The expansion is the time when real GDP is rising, the peak is when real GD reaches a maximum, the recession is when real GDP is falling, and the trough is when real GDP reaches a minimum. It looks like the economy is currently in the expansion phase of the business cycle. This is because the growth rate of real GDP is positive, which means that the economy is now growing. Since real GDP is rising, this necessarily implies that the economy is currently in an expansion.
The question from our instructor is: Class, do you agree? Where are we in the cycle?
Can you please help me answer this in easily understandable terms?