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One phase of the business cycle is the expansion phase. This phase is a two-fold one, including recovery and prosperity. During the recovery period there is an ever-growing expansion of existing facilities and new facilities for production are created. More
businesses are created and older one expanded. Improvements of various kinds are made. There is an ever increasing optimism about the future of economic growth. Much capital is invested in machinery or "heavy" industry. More labor is employed. More raw materials are required. As one part of the economy develops, other parts are affected. For example. a great expansion in automobiles results in an expansion of the steel. glass and rubber industries. Roads are required: thus the icemen: and machinery industries are stimulated. Demand for labor and materials results in greater prosperity for workers and suppliers of raw materials, including farmers. This increases purchasing power and the volume of goods aught and sold. Thus prosperity is diffused among the various sezments of the population. This prosperity period may continue to and rise without an apparent end. However. this reaches a peak and stops spiral in upwards. This is the expansion phase. ;
