For each of the following scenarios, identify whether the issue described is caused by a shock to aggregate demand or aggregate supply (temporary or permanent).

You read in the newspaper that the unemployment rate has increased and that growth in the consumer price index appears to be on the rise.

A.Aggregate demand shock

B.Aggregate supply shock

While GDP data show positive growth, in the past 6 months estimates show that potential GDP has grown faster than GDP. At the same time, inflation has fallen relative to the central bank's target of 2 percent.

A.Aggregate demand shock

B.Aggregate supply shock