4 THE SOLUTION TO THE PROBLEM:

Unemployment is not an issue that cannot be resolved if we work hard and honestly to resolve it. Written below are my thoughts about how we can potentially decrease unemployment rate in Pakistan.

4.1 Educational Amends:

Ministry of education should first revise books of higher secondary and secondary education introducing modern subjects. They should introduce policies to motivate students to learn skills apart from the syllabus. For example, the Prime Minister's Kamyab Jawan – Youth Entrepreneurship Scheme.

4.2 Fiscal Policy:

Government can monitor and influence economic condition of Pakistan by using fiscal policy. It can also help to boost AD (Aggregate Demand) of products. Fiscal policy can decrease unemployment by helping to increase aggregate demand and the rate of economic growth. The government will need to introduce expansionary fiscal policy; this involves cutting taxes and increasing government spending. Lower taxes will help people to spend more, leading to higher aggregate demand, causing increase in jobs which will decrease unemployment rate.

4.3 Geographic subsidies:

Often unemployed people are more concentrated in certain regions. For this geographical unemployment issue, to firms who set up in depressed areas governments can provide tax breaks. Alternatively, they can provide financial assistance to unemployed workers who move to areas with high employment.

4.4 Advancement of agriculture sector:

The latest technologies should be used in the agriculture sector; the use of advance machinery can help in boosting agriculture output in Pakistan. Almost 44 % of people get jobs from agriculture, which is 20.9 % of the total GDP of the country. Therefore, we seriously need to expand this sector.

4.5 Depreciation of exchange rates:

Government can decrease exchange rates during trading to increase export demands of the country.

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4.6 Monetary Policy:

Monetary policy is often wont to stabilize the overall price index. the govt should also take measures to enhance employment, so consumer's cost of living doesn't increase; hence there's a positive change within the economy and no increase in inflation.

4.7 Reduce the power of trades unions:

If unions can bargain for wages above the market clearing level, they will cause real wage unemployment. In this case reducing the influence of trades unions (or reducing Minimum wages) will help solve this real wage unemployment.

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