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Suppose the number of employed people in Pakistan is 20.5 million. The unemployment rate in this economy is 8.8 percent, and the labor force participation rate is 65 percent. (1.5 Marks) What is the size of the labor force and working-age population? How many people are unemployed? Explain and analyze different government policies which affect the unemployment rate in Pakistan? (1.5 Marks, Maximum 200 words). Before June 2020, the labor market in Pakistan was at equilibrium with an equilibrium wage (W E) of Rs. 15,000 and equilibrium quantity of labor (LE) 10 million. In the last week of June, 2020, government of Pakistan imposed a minimum wage Act raising the minimum wage to Rs. 20,000. Using a graph, explain the effect of imposition of minimum wage on unemployment in labor market of Pakistan (2 Marks).
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