In terms of national income accounting concepts,absorption is defined as GNP:
A) plus imports minus exports.
B) plus exports minus imports.
C) plus imports plus exports.
D) minus investment expenditures minus exports.

Question

Quizplus · Accepted Answer

Absorption in terms of national income accounting is defined as the total demand for goods and services within a country. It includes all domestic consumption, investment, and government spending, plus imports (since these are goods and services consumed domestically but produced abroad), minus exports (since these are produced domestically but consumed abroad). Therefore, absorption is GNP plus imports minus exports.

In Terms of National Income Accounting Concepts,absorption Is Defined as GNP