What term describes the highest GDP level achieved when firms are operating at full capacity?

The term that describes the highest GDP level achieved when firms are operating at full capacity is "Peak." This stage in the economic cycle represents the point where economic activity is at its highest, characterized by maximum output, low unemployment, and often rising prices due to increased demand. At the peak, resources are fully utilized, which means that firms are producing goods and services at their full potential, reflecting strong economic performance.

In the context of economic cycles, recovery refers to a phase following a recession during which economic indicators begin to improve, but it has not reached the peak level of output. Trough describes the lowest point in the cycle where economic activity is at its weakest. Recession indicates a decline in economic activity that can occur before a recovery begins. Each of these terms highlights different stages of the economic cycle, with "peak" specifically denoting the maximum output level.