Suppose a natural disaster destroys some of the nation's capital stock. The central bank's goal is to stabilize the price level. Given this goal, what should the central bank do in response to the disaster in the context of the real business cycle model? Assume that for any function of two or more variables, the effect of an ambiguous change in one variable is outweighed by the effect of an unambiguous change in any other variable.Without central bank intervention, in response to the natural disaster's destruction of the nation's capital stock, equilibrium output

must increase,

must not change,

may increase, decrease, or not change,

must decrease,

the real interest rate

may increase, decrease, or not change,

must increase,

must not change,

must decrease,

and the price level

must increase.

must decrease.

must not change.

may increase, decrease, or not change.

Therefore, to achieve its goal, the appropriate course of action for the central bank

is to decrease

may be to increase, decrease, or not change

is to increase

is to not change

the money supply. If it is assumed that for any function of two or more variables, the effect of an ambiguous change in one variable is outweighed by the effect of an unambiguous change in any other variable, then without central bank intervention the price level

must not change,

may increase, decrease, or not change

must increase,

must decrease,

and the appropriate course of action for the central bank

is to decrease

is to increase

is to not change

could be to increase, decrease, or not change

the money supply.