1. Assume that the real interest rate in the United States is 3 percent and the real interest rate in Mexico is 1 percent. In which direction would capital flow move? (A) Capital flow would move from the United States to Mexico because Mexican investors would receive a better return on their investment. (B) Capital flow would move from Mexico to the United States because American investors would receive a better return on their investment. (C) Capital flow would move from the United States to Mexico because American investors would receive a better return on their investment. (D) Capital flow would move from Mexico to the United States because Mexican investors would receive a better return on their investment. (E) Capital flow would move from Mexico to the United States and create a trade surplus in Mexico.