Final answer:
Cerebrospinal fluid is produced by the choroid plexus within the brain's ventricles and is reabsorbed into the blood via arachnoid granulations.
Step-by-step explanation:
The cerebrospinal fluid (CSF) is produced within the ventricles, specifically by the choroid plexus. It circulates through the ventricular system and is then absorbed into the venous circulation by special structures called the arachnoid granulations. These are where the arachnoid membrane extends into the dural sinuses, facilitating the reabsorption of the CSF into the blood, thus removing metabolic wastes from the central nervous tissue.