In the above argument, we see the author establishes a positive relationship between interest rate and demand for goods and services. According to the statement, low demand for goods and services cause recession of an economy. So comparing with the above mentioned reasoning we can establish another relationship between inflation and unemployment. In macroeconomics, there is a peculiar relationship between inflation and unemployment. This relationship is actually a short run trade off. A high inflation rate in the economy causes low level of unemployment. On the other hand, a very low level inflation rate generates higher level of unemployment. Policymakers can choose anyone out of the two.

In 1958, economist A.W Phillips revealed this trade off. The greater the aggregate demand for goods and services, the greater the economy's output and the higher level of price level. The higher the price level, the higher the rate of inflation. Higher level of inflation points out lower unemployment. In contrast, lower level of inflation points out higher level of unemployment.