Which term describes an economic condition when production and sales reach their highest level?

The term that describes an economic condition when production and sales reach their highest level is "Peak." In economic cycles, a peak is the point at which economic activity is at its maximum, characterized by high levels of output, employment, and consumer demand. This stage signifies a favorable economic environment where businesses are operating at full capacity, and the market is often experiencing strong profit margins.

In contrast, terms like downturn, recession, and depression indicate negative economic conditions. A downturn reflects a decline in economic performance, often following a peak, while a recession denotes a significant decline in economic activity across the economy lasting more than a few months. A depression is an even more severe downturn, characterized by prolonged economic malaise and high unemployment. Thus, "Peak" specifically refers to the height of economic activity, making it the correct choice in this context.