Explanation:

Depression is the severe form of recession with the lowest level of economic activity. It is a prolonged and deep decline in economic activity, characterized by high unemployment, low production, and investment levels, and a decline in consumer spending.

Characteristics of depression:

1. High unemployment: During a depression, there is a significant increase in unemployment rates as businesses cut back on production and lay off workers.

2. Decline in consumer spending: As individuals become unemployed, they have less money to spend, leading to a decline in consumer spending, which further exacerbates the economic downturn.

3. Low production: During a depression, businesses reduce production levels and even shut down, leading to a decrease in the overall output of goods and services.

4. Decrease in investment: During a depression, businesses and individuals are hesitant to invest in new projects, leading to a decrease in investment levels.

5. Prolonged duration: Depressions are characterized by their long duration, often lasting for several years.

Examples of depression:

1. The Great Depression (1929-1939): The Great Depression was a severe worldwide economic depression that lasted for a decade. It was characterized by high unemployment, low production, and investment levels, and a decline in consumer spending.

2. The Great Recession (2007-2009): The Great Recession was a severe global economic downturn that lasted from 2007 to 2009. It was characterized by a significant decline in economic activity, high unemployment, and a decline in consumer spending.

In conclusion, depression is the severe form of recession, characterized by a prolonged and deep decline in economic activity, high unemployment, low production, and investment levels, and a decline in consumer spending.