During which phase do consumers start to spend again due to optimism about the future?

The correct choice of recovery aligns with the economic cycle's dynamics. During the recovery phase, economic indicators begin to improve after a period of decline, such as a recession. This improvement often leads to increased consumer confidence and optimism about the future, prompting individuals to start spending again.

As consumers perceive that economic conditions are stabilizing and improving, they are more likely to make purchases, invest in businesses, and engage in economic activities that drive growth. This renewed spending is crucial for sustaining the positive momentum in the economy, as it can influence businesses to produce more goods and services, potentially leading to job creation and further economic expansion.

In contrast, during a depression or recession, economic downturns limit consumer spending, and individuals are often more cautious, prioritizing savings over expenditures. Similarly, while the term "rebound" suggests a return to strong growth, it does not specifically represent the phase characterized by increasing consumer spending following initial signs of optimism. Thus, recovery is specifically recognized for its association with the turning point where consumer behavior begins to shift positively.