@Eshal

It is wrong that inflation and unemployment can't exist simultaneously. This is apparent in Pakistan as we see both of these phenomena. The existence of both problems is called stagflation. Stagflation derives its name from two concepts; inflation and unemployment (stagnation). Thus inflation and stagnation existence at the same time is referred to as stagflation.

The exact relation between the unemployment and inflation is negative i.e. if unemployment increases inflation will decrease and vice versa. The relation between these two variables is found by Philips, a British economist. This relation became very famous and is one of the cornerstones in the modern macroeconomics.

One word of caution; K.K. Dewet is not a standard economics book to follow. Try Abel and Bernanki (Macroeconomics) as this is easy one to follow.

Regards