After reading or viewing fiction, I will often ask you to identify the story arc. In my class, this can also be the protagonist's character arc. Often times, the two are relatively close to the same.
The story arc helps the reader understand the structure of a story and enables them to start to unearth the subjects, topics, concepts, and ultimately the theme of the story. It provides common language for discussing a story as well.
For a student, it's also a great way to indicate to your teacher that you understand a story. As a writer, story arc details are important to create a story that's interesting for a reader.
I typically ask students to identify and explain the following for a story or character arc: Exposition, Goals, Obstacles, the Climax, Resolution, and what's at Stake.
Something that's not indicated on the above infographic are "stakes." Essentially, stakes are what's on the line (usually for a particular character) if the goals are or aren't reached. In an action story "the stakes" usually revolve around someone's survival. In a romance, the stakes are generally a successful or new relationship.
When describing the stakes be sure to refer to the goal. For example, character A's goal is to dismantle a bomb on a bus. If character A fails to do so, the people on the bus will be injured or die. An obstacle preventing character A from doing so was that the bomb on the bus was wired to blow up if the bus slows down to under 50 miles per hour. Another obstacle is that the bomb can also be triggered by the bomb maker, who has emphatically stated that he will blow the bus up if anyone attempts to get off the bus. And for those unaware, that's the basic setup for the 90s action film Speed.
I usually tell students that to include the setting and main characters when they describe the exposition. However, generally you want to include the things that the goal, obstacles, stakes, climax, and resolution don't cover, or items that need explaining before those other story arc elements are covered.
The below infographic is a general story arc. It could be used as a character arc and plot arc. Other arcs exist, some that look like roller coasters, and some with peaks in peculiar places. You may encounter names for other types of arcs in your research.
note: the above is also posted to andrewjoegeorge.com