Since the Brexit, the UK economy has been severely affected. Suppose UK reports changes in selected macroeconomic data since the Brexit:

	% change in real GDP (yoy)	Inflation rate	Unemployment rate
Year 1 Q4	-2%	1%	5%
Year 2 Q1	-5%	6%	8%
Year 3 Q3	-8%	7%	10%

Notwithstanding the stagnate economy, economists disagree on what causes the changing economic performance:

I. Some argue that it is the result of the disrupted supply-chain and production since the Brexit;

II. Others argue that it mainly comes from the drop in consumption and investment under the uncertain environment.

a. Using an AD-AS model, explain whether argument (I) or (II) above fits better to the case of UK.

b. How could the central bank of UK react? Given your answer in (a), what are the problems and concerns of this action? Briefly explain.