Business Cycle, Recession, Depression
Business cycle is the instability in the market. It is the expansionary and contractionary phases in the growth rate of real GDP.
It has 4 stages: peak, contraction, Trough and expansion.
During Trough: the real GDP reaches its minimum and a turning point to expansion
During expansion: Our economy grows ==> prices to go up ==> unemployment rate to go down. Down side inflation
During peak: real GDP reaches its maximum
During Contraction: Demands are down ==> price to go down ==> unemployment rate to go up. Down side recession
Recession: is a two quarter or half a year of declining real GDP. It can also be defined as a period of time when the economy is producing below its potential and has two consecutive quarters negative growth.
Depression: is a 2 year declining real GDP (the economy in contractionary stage for 2 years).
Dr. Stephanie Powers, Introduction to Macroeconomics - Economic Growth p.g. 27 - 28, Donald School of Business Winter 2012.

Expansion-GDP increases
Contraction- people buy less, prices decrease, AD decreases and Unemployment increases
Trough- we are at the bottom of the contraction phase. Prices fall enough that we can start to buy again
we start the expansion again so GDP increases, prices increase, AD increases and unemployment goes down.

Dr. Stephanie Powers, "Economic Growth", Intro to Macroeconomics.(Lecture, Donald School of Business, Red Deer Alberta, Winter 2012)