Consider the Real Intertemporal Model we discussed in class. Suppose that a severe blizzard hits the economy of Connecticut and destroys big plants located in Manchester. In the context of our model, this is equivalent to a decrease in the current capital stock K.

show its impact on the goods(or the output) market. Here, you must draw graph to show how equilibrium output and price (interest rate r) changed as a result of the blizzard. You should explain how output demand and output supply change and why.