What typically follows a recession in the business cycle?

In the context of the business cycle, after a recession, the economy generally experiences a phase of expansionary growth. A recession is characterized by a decline in economic activity, leading to reduced output, job losses, and lower consumer spending. Once the factors contributing to the recession begin to improve, economic indicators typically start to rise again.

During the expansionary growth phase, businesses begin to increase their investment, hiring practices improve, consumer confidence gradually rises, and overall economic output starts to increase. This period is marked by increased spending, both from households and businesses, fostering further growth and development in the economy.

The other options do not accurately describe the typical outcome following a recession. A downturn in investment usually occurs during a recession, rather than following one. A drop in consumer confidence is also more relevant during a recession when consumers feel uncertain about the economic future. Increased unemployment rates are indicative of a recession itself, not a consequence of what follows it. Thus, expansionary growth is the most accurate depiction of the phase that typically follows a recession in the business cycle.