Which economic phenomenon is typically observed during periods of economic expansion?

During periods of economic expansion, rising inflation rates are commonly observed as demand for goods and services increases. When the economy is doing well, consumer spending tends to rise, leading to higher demand across various sectors. This heightened demand can push prices upward, resulting in inflation.

Additionally, as businesses ramp up production to meet this demand, they may also increase wages and hire more workers, which can further stimulate consumer spending. This cycle can contribute to rising prices as the increased flowing money into the economy combats the fixed supply of goods and services available at a given time.

The other choices reflect scenarios that typically do not align with economic expansion; for instance, increasing unemployment usually marks economic downturns, while decreasing consumer confidence implies that individuals are less willing to spend, which is contrary to the general behavior during an expansion. Lower interest rates may occur but are often a result of policy aimed at stimulating growth rather than a direct consequence of expansion itself.