Which phase of the business cycle is characterized by falling unemployment and rising production?

The phase of the business cycle characterized by falling unemployment and rising production is the expansion phase. During expansion, economic activity improves, leading to increased consumer spending and business investments. This boost in demand encourages companies to hire more employees to meet production needs, resulting in lower unemployment rates.

As production ramps up, businesses invest in capital and resources, further stimulating the economy. The expansion phase reflects overall growth, with increases in GDP and improvement in the economic environment. The positive momentum in employment and production creates a cycle that often leads to further economic activity.

Other phases of the business cycle are defined by different characteristics. For example, the trough represents the lowest point of economic activity, where unemployment is typically high and production is low. A recession indicates a period of economic decline, where unemployment rises and production decreases. Finally, the peak phase is when the economy reaches its highest point before a downturn, but it may not necessarily reflect falling unemployment and rising production, as those indicators often begin to decline as the economy transitions into a recession.