What describes the highest point of economic activity in the business cycle before a decline?

The term that describes the highest point of economic activity in the business cycle before a decline is "Peak." At this stage, the economy is operating at its maximum potential, characterized by the highest levels of employment, production, and consumer confidence. During a peak, economic indicators such as GDP growth are at their highest, leading to increased investment and spending.

This phase is critical because it represents a transition point; afterwards, the economy typically experiences a downturn or recession. Understanding the peak is vital for predicting later phases of the business cycle, which can help businesses and policymakers make informed decisions regarding investments and resource allocation.