Question 3 Assume that in the two-country framework (country J and country C), capital is allowed to flow across countries without restriction. Suppose the rate of return for capital in country J is higher than the rate of return for capital in country C. a What is your prediction concerning the pattern of capital fows between the two countries? (1 mark) b. Using an appropriate diagram, illustrate the situation before and after the capital movements. (2 marks) C. State the economic effects of the capital movement for both the country J dan C. 1 . Changes in total output (Gross Domestic Product/GDP) for Country J and Country C. (2 marks) ii. Total returns for capital and total wages in country J. Explain who gains and who losses in country J due to the capital movements. (3 marks) iii. Total returns for capital and total wages in country C. Explain who gains and who losses in country C due to the capital movements. (3 marks) iv. Changes in total income (Gross National Products/KNK) for country J and country C. (2 marks) V. Changes in per capita income for country J and country C. (2 marks)