Expansion Phase

The expansion phase is a part of the business cycle in which the economy is growing and expanding. During this phase, businesses experience growth and increased profits, leading to a rise in consumer confidence, employment, and spending. However, there are some factors that do not occur during the expansion phase, which are discussed below:

Factors that do not occur during the expansion phase:

D) None of the above

Explanation:

None of the options mentioned in the question is incorrect during the expansion phase. Therefore, the correct answer is option D, which states that none of the above factors do not occur during the expansion phase.

Let's discuss the factors that occur during the expansion phase in detail:

a) Consumer spending increases:

During the expansion phase, people have more disposable income due to increased employment and income. As a result, they tend to spend more on goods and services, leading to a rise in consumer spending. This, in turn, boosts business sales and profits.

b) Employment increases as demand for labour rises:

During the expansion phase, businesses experience growth and increased profits, leading to a rise in demand for goods and services. To meet this demand, businesses tend to hire more employees, leading to increased employment.

c) Business profits and business confidence increased:

During the expansion phase, businesses experience growth and increased profits due to increased demand for goods and services. This, in turn, leads to increased business confidence, as businesses become more optimistic about the future and tend to invest more in their operations.

Conclusion:

In conclusion, all the options mentioned in the question are factors that occur during the expansion phase. Therefore, the correct answer is option D, which states that none of the above factors do not occur during the expansion phase.

As expansion occurs production in an economy increases thereby employment and demand for labour also increases. This leads to increase in the income of households and consumer spending also tends to increase.With an increased demand of consumers business profits and confidence also increases. So all the above mentioned options takes place in the expansion phase. option D is the correct answer.