Economics, 3rd Edition

Interpreting Line Graphs 

Look at the line graph in panel (c) of Figure 2A.2. The unemployment rate starts 

off at about 8.7 per cent in 2000, falls to around 8.5 per cent in 2001 before rising to about 9.2 per cent in 

2004. The difference between the unemployment rate in 2001 and 2004 is about 0.7 per cent – a relatively 

small rise – which is represented by a moderately upward sloping line. From 2004, the unemployment rate 

falls to around 7.1 per cent in 2008 – a relatively large fall at 2.1 per cent. This is represented by a relatively 

steep line. Equally, the rise in the unemployment rate after 2008 to around 9.6 per cent in 2010 is repres-

ented by a steep rise in the line. Unemployment rose by around 2.5 per cent in just two years compared 

to the rise in unemployment of just 0.7 per cent in three years between 2001 and 2004. Between 2010 

and 2011, the unemployment rate remained at about 9.6 per cent and so we would say that the rate had 

been ‘flat’ between those two dates represented by the flat shape of the line.

Looking at the shallowness or steepness of a line graph can tell us a great deal about the rate of change –  

whether our variable is changing quickly or slowly. However, we must take care in ensuring that we take 

note of the scale of the graph we are using. Look at the graph in panel (d). This shows exactly the same 

information as that in panel (c) but the scale on the vertical axis has been changed. The change in the 

unemployment rate does not look anything like as dramatic in panel (d) and the line appears to be relatively 

flat. This is a reminder that if we are comparing information on two different line graphs we have to make 

sure that we take note of the scale before drawing any conclusions.