What phase of the business cycle is characterized by increasing output and sales of goods and services?

The phase of the business cycle characterized by increasing output and sales of goods and services is recovery. During this phase, an economy begins to rebound from a downturn or recession. Businesses start to see improvement in consumer confidence, leading to increased spending. As demand for products and services rises, companies ramp up production, hire more employees, and invest in new projects, which further stimulates economic growth.

In this context, recovery is crucial as it signifies a transition toward a more prosperous economic environment, wherein indicators such as GDP, employment, and consumer spending are on the rise. This phase plays a vital role in establishing positive momentum that can lead to further growth and expansion.