Explain why there may be a conflict between unemployment and inflation

If the unemployment in the economy is demand deficient unemployment (Keynesian unemployment), the government needs to stimulate growth in the economy and increase aggregate demand as there is a lack of demand within the economy. The government can do this by shifting AD to the right, by stimulating an increase in consumption via government spending. This will increase the demand for labour from firms, as there is a greater demand for goods in the economy, requiring more labour to meet this increased demand for production. However, this shift in AD will cause the economy to 'overheat' as it approaches productive capacity, creating an increase in the price level (inflation). This shows the conflict/trade off between unemployment and inflation as inflation is created by the methods used to combat unemployment, and very often, the methods used to reduce inflation (often reducing AD) can create unemployment.

Alternative explanation, Philips Curve