Question 38 (1 point) Based on the Figure 1, choose the correct statement. Assume that Nation 1 is a foreign investor in Nation 2. Figure 1. Output and welfare effects of international capital transfers Nation 1 Nation 2 Value of marginal product of capital In Nation 2 Value of marginal product of capital VMPK, VMPK Total capital stock of Nations 1 and 2 combined 1) Capital inflows in Nation 1 increase the value of marginal product of capital from C to N. 2) Capital inflows in Nation 1 decrease the value of marginal product of capital from N to C. (3) Capital inflows in Nation 2 increase the value of marginal product of capital from T to H. Capital inflows in Nation 2 decrease the value of marginal product of capital from H to T