What do we call a situation where economic conditions are generally favorable and improving?

The term used to describe a situation where economic conditions are generally favorable and improving is "expansion." During an expansion phase in the business cycle, the economy experiences increased output, rising levels of employment, and growing consumer confidence. This positive economic activity often leads to higher spending, investment, and overall growth in GDP.

In contrast, other terms describe different phases of the economic cycle. A recession indicates a period of economic decline, characterized by falling GDP and increasing unemployment. A trough refers to the lowest point in the business cycle, after which an economy begins to recover. Contraction signifies a period of negative economic growth, leading to a decrease in economic activity. Therefore, expansion is the phase that directly represents favorable and improving economic conditions.