Which term best describes an economy that is showing signs of improvement after a recession?

The term "recovery" is used to describe an economy that is gradually improving after a recession. During the recovery phase, various economic indicators such as employment rates, consumer spending, and overall economic output begin to rise, signaling that the economy is moving away from the negative impacts of a recession. This phase reflects a period where businesses may start to invest and produce more, and consumers regain confidence to spend, thus fostering further growth.

Understanding recovery is crucial, as it signifies that the worst of the economic downturn has passed, and positive changes are taking place. This concept is distinct from expansion, which refers to a broader phase of economic growth that follows recovery. While expansion indicates that the economy is thriving and operating at full capacity, recovery focuses specifically on the stages of healing and revitalization after a recession. Recognizing this terminology helps to better analyze and interpret economic trends and policies.