Absorption is the total demand for all final

Final good

In economics final goods are goods that are ultimately consumed rather than used in the production of another good. For example, a car sold to a consumer is a final good; the components such as tires sold to the car manufacturer are not; they are intermediate goods used to make the final good.When...

 marketed goods and services

Goods and services

In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax....

 by all economic agent

Agent (economics)

In economics, an agent is an actor and decision maker in a model. Typically, every agent makes decisions by solving a well or ill defined optimization/choice problem. The term agent can also be seen as equivalent to player in game theory....

s resident in an economy

Economy

An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

, regardless of the origin of the goods and services themselves. As the absorption is equal to the sum of all domestically-produced goods consumed locally and all imports, it is equal to national income minus the balance of trade

Balance of trade

The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...

.

The term was coined, and its relation to the balance of trade identified, by Sidney Alexander in 1952.

The term "absorption" is often used in real estate to assess demand for leasing space.