This may be splitting hairs, but I think "technically" the answer is wrong; that is, I would interpret the question differently.
In my mind [i]application[/] lifecycle is how an application is used. Typically this includes such things as: startup, initialization, login, pause/resume, sleep states, cleanup, and shutdown. It can be further refined depending on the complexity of the system and level of detail. Examples of application lifecycles include
applet lifecycle,
servlet lifecycle, and
EJB lifecycle.
The answer you gave was a development process, or development lifecycle.
Well, that's how I would intepret the quesiton, anyway.
--Mark