The article examines how the COVID-19 crisis affected the economy by looking at both supply and demand shocks. Negative supply shocks can lead to stagflation, while negative demand shocks can cause deflation. The study shows that both types of shocks contributed equally to the decrease in real GDP from February to May 2020 in the United States. Despite high unemployment rates, the impact was not evenly distributed across all markets, making traditional stimulus less effective. Complementarities in production can amplify the effects of supply shocks but lessen the impact of demand shocks.