Concept:
A diode allows current to flow easily in one direction and blocks current in the opposite direction.
Step 1: In forward bias, the positive terminal is connected to \(P\)-side and negative terminal to \(N\)-side.
Step 2: This reduces the depletion barrier.
Step 3: Majority carriers cross the junction easily.
Step 4: Hence, current flows through the diode.
Therefore:
\[
\boxed{\text{Forward biased}}
\]