In macroeconomic terminology, short term contractions and expansions in overall economic activity that repeat over time are collectively known by which name?

Introduction / Context:
Economies rarely grow in a perfectly straight line. Instead, they go through phases of expansion, peak, slowdown, recession, and recovery. These ups and downs in aggregate economic activity over time are an important subject of macroeconomic study. The question asks for the standard term used to describe this recurring pattern of short term contractions and expansions.

Given Data / Assumptions:

• We are dealing with overall economic activity, not a single sector.
• The pattern involves both contractions and expansions.
• These movements are short term and repeat over time.
• Options include expansions, recession, deficits, and business cycle.

Concept / Approach:
The correct term that summarises the repeating sequence of upswings and downswings in the economy is business cycle. A business cycle includes four main phases: expansion, peak, contraction (or recession) and trough. It is broader than just a single recession or a single expansion. It focuses on fluctuations in real output, employment, income and other macro variables over time.

Step-by-Step Solution:
Step 1: Note that the question mentions both contractions and expansions, not just one phase.Step 2: Recall that business cycle is the standard term for the recurring ups and downs in economic activity.Step 3: Recognise that expansion is only one upward phase in this cycle.Step 4: Recession is a downward phase, not the entire sequence.Step 5: Deficits refer to gaps in budgets or trade, not to overall output fluctuations, so they do not fit.

Verification / Alternative Check:
Macroeconomics textbooks define business cycle as the pattern of periodic but irregular fluctuations in economic activity, measured by changes in real gross domestic product and other indicators. They emphasise that the cycle includes different phases rather than just one condition. None of the other terms in the options is used in such a broad sense to describe the full set of movements, which confirms that business cycle is the term being tested.

Why Other Options Are Wrong:
Expansions refer only to the rising segments of economic activity and therefore ignore the contraction periods that the question clearly mentions. Recession is only one phase of the business cycle where output and employment decline; it does not include the upward swing. Deficits are related to public finances or external accounts and do not describe alternating contractions and expansions in the whole economy. Thus, only business cycle matches the description given.

Common Pitfalls:
Some candidates choose recession because they associate it strongly with economic downturns, forgetting that the question explicitly includes expansions. Others may think expansion alone represents cycles because it feels like the normal desired state. To answer accurately, always ask whether the term covers both directions of change and whether it is used in macroeconomics for repeated patterns rather than for a single episode.

Final Answer:
The recurring pattern of short term contractions and expansions in economic activity is called the business cycle.