Which of the following is NOT part of the business cycle?

• A. Expansion
• B. Peak
• C. Equilibrium
• D. Recession

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of the business cycle, which refers to the fluctuations in economic activity over time, typically measured by changes in real GDP and other macroeconomic indicators.
2. Step 2: Identify the main phases of the business cycle, which generally include Expansion (period of increasing economic activity), Peak (the highest point before a downturn), Recession (a period of declining economic activity), and Trough (the lowest point before recovery).
3. Step 3: Recognize that 'Equilibrium' is an economic concept referring to a state where supply equals demand in a market, rather than a phase of the business cycle.
4. Step 4: Compare the given options to the standard phases of the business cycle and note that Expansion, Peak, and Recession are all recognized phases, while Equilibrium is not.
5. Step 5: Conclude that the correct answer is 'Equilibrium' because it is not part of the business cycle phases.