Which of the following phases is part of the business cycle?

The business cycle encompasses various phases that illustrate the fluctuations in economic activity over time. Each of the phases mentioned—recession, depression, recovery, and boom—represents significant segments within this cycle.

Recession refers to a period characterized by reduced economic activity, business closures, and increases in unemployment. It marks the initial decline in the business cycle, typically following a peak.

Depression is an extended period of severe economic downturn. Although less frequent, it demonstrates a more profound and lasting impact on the economy than a typical recession.

Recovery indicates a phase where the economy begins to improve, with increasing economic activities and a decline in unemployment, ultimately leading to a boom phase. The boom phase signifies a point of expansion where economic growth is robust, often leading to higher consumer spending, increased production, and rising employment levels.

Since all these phases are integral to understanding the dynamics of the business cycle, the correct answer encapsulates the entirety of the business cycle by including all these components. Recognizing each phase is crucial for comprehending how economies evolve and respond to various economic pressures over time.