What does economic expansion involve in terms of market conditions?

Economic expansion typically refers to a phase in which the economy is growing, characterized by increased levels of production, employment, and consumer spending. During this period, businesses often ramp up their production capabilities to meet rising demand for goods and services. This can lead to the introduction of new products, as companies innovate to capture market interest and consumer needs.

When the economy is expanding, there is generally a positive consumer sentiment, leading to higher expenditures on both necessities and luxuries. Therefore, the growth in production levels and the introduction of new products are direct indicators of economic expansion, as businesses seek to leverage opportunities presented by increased consumer demand.

This context clarifies why the answer highlighting an increase in production and the introduction of new products accurately depicts the conditions of economic expansion, as opposed to the other options that suggest contraction or stagnation in the economy.