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Updated: Aug 20, 2021

1. In the national accounts, the total of expenditure on real goods and services, by consumers, investors, and the government. Absorption is the use of output: it excludes exports and includes imports. This is contrasted with production, which includes exports and excludes imports. The absorption approach to devaluation looks at its effects on various forms of expenditure and points out that devaluation can only improve the balance of payments on current account if production increases relative to absorption. 2. In industrial organization, a ‘merger in which the acquired company transfers all its assets and liabilities to the acquiring company in exchange for its securities and cash.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.