What is the difference between a recession and depression?

To find the answer to this question, we headed to a dictionary for some definitions. <a href="http://www.dictionary.com/">Dictionary.com</a> defines an economic <a href="http://www.dictionary.com/cgi-bin/dict.pl?term=recession">recession</a> as, "an extended decline in general business activity, typically three consecutive quarters of falling real gross national product." The same site defines an economic <a href="http://www.dictionary.com/cgi-bin/dict.pl?term=depression">depression</a> as, "a period of drastic decline in a national or international economy, characterized by decreasing business activity, falling prices, and unemployment." These definitions indicate that the main difference between a recession and depression is the magnitude of economic decline. A depression is simply a severe recession. With that in mind, we searched on "<a href="http://search.yahoo.com/search?p=recession">recession</a>," which led straight to Yahoo!'s <a href="http://dir.yahoo.com/Social_Science/ ...  more