The correct characterization is:
A depression is a particularly deep recession with high levels of unemployment.
Here's a brief overview of both terms:
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Recession: This is generally defined as a significant decline in economic activity across the economy lasting longer than a few months. It is typically characterized by falling GDP, higher unemployment, reduced consumer spending, and declining business investment.
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Depression: This is a more severe and prolonged downturn in economic activity compared to a recession. Depressions involve significant declines in GDP and can lead to very high levels of unemployment, widespread bankruptcies, and severe impacts on the overall economy.
The other statements provided are not accurate definitions of recession and depression. Specifically, a depression is not simply a longer and more severe recession, nor does it necessarily involve high levels of inflation (which is often associated with stagflation instead). Additionally, both recessions and depressions are periods of economic contraction, not growth.
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