When the actual unemployment rate is greater than the NAIRU, the inflation rate

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When the actual unemployment rate is greater than the Non-Accelerating Inflation Rate of Unemployment (NAIRU), it indicates that there is slack in the labor market. This slack often leads to decreased pressure on wages, which in turn can lead to a decrease in inflation. This is because with higher unemployment, workers have less bargaining power for wage increases, and businesses are less likely to pass on cost increases to consumers in the form of higher prices.

When the Actual Unemployment Rate Is Greater Than the NAIRU