5. In recent years, the United Kingdom has experienced a significant inflow of capital in the form of direct investment, especially from the Far East. For example, both Honda and Nissan have built car plants in the United Kingdom.

a. Using a diagram of the UK capital market, show the effect of this inflow on the rental price of capital in the United Kingdom and on the quantity of capital in use.

b. Using a diagram of the UK labour market, show the effect of the capital inflow on the average wage paid to UK workers.