The following graphs depict the market for loanable funds and the relationship between the real interest rate and the level of net capital outflow (NCO) measured in terms of the Mexican currency, the peso.   Complete the first row of the table to reflect the state of the markets in Mexico.   Real Interest Rate Net Capital Outflow (NCO) (Percent) (Billions of pesos) Initial state     After capital flight       Now, suppose that Mexico experiences a sudden bout of political turmoil, which causes world financial markets to become uneasy. Because people now view Mexico as unstable, they decide to pull some of their assets out of Mexico and put them into more stable economies. This unexpected shock to the demand for assets in Mexico is known as capital flight.     Summarize the results of capital flight by completing the following table.   Real Interest Rate Real Exchange Rate Net Capital Outflow Effects of capital flight     (decrease or increase)    ( decrease or increase) (decrease or increase)

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