In equilibrium, rate of growth of capital in a simple closed economy is determined primarily by

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In a simple closed economy, the rate of growth of capital is determined primarily by the level of saving less expenditures for replacement capital. This is because in the absence of trade and international capital flows, the economy's total capital stock can only increase if savings exceed the amount needed to replace depreciated capital. Therefore, the difference between savings and replacement is available for investment and results in the growth of the economy's capital stock. The other choices (A, C, and D) may have an impact on the economy's growth rate, but they are not the primary determinants of the rate of growth of capital in a closed economy.

In Equilibrium, Rate of Growth of Capital in a Simple