Answer: high capital-to-labor ratio to those with a low capital-to-labor ratio.

## Explanation According to the neoclassical model of international capital flows: - Capital tends to flow from countries with **high capital-to-labor ratios** to countries with **low capital-to-labor ratios** - This occurs because capital is more productive (higher marginal product) in countries where it is relatively scarce - Countries with high capital-to-labor ratios typically have lower returns on capital due to diminishing marginal returns - Countries with low capital-to-labor ratios offer higher potential returns on capital - In open economies with free trade and international borrowing/lending, capital seeks the highest risk-adjusted returns Therefore, capital flows from capital-abundant countries (high capital-to-labor ratio) to capital-scarce countries (low capital-to-labor ratio).

Author: LeetQuiz Editorial Team