Basic Graphical Techniques in Economics
Basic Graphical Techniques in Economics
·
Graphical techniques are essential tools in
economics for analyzing relationships between variables, trends, and economic
concepts.
1. Line
Graphs
·
Used to represent the relationship between two
variables over time, such as demand and supply, price and quantity, or GDP
growth.
Example:
Demand and Supply Curve
A typical
demand and supply curve shows the equilibrium price where quantity demanded
equals quantity supplied.
📌
2. Bar
Charts
Used to
compare different quantities, such as GDP of different countries, inflation
rates, or employment levels.
Example:
GDP Comparison of Countries
A bar chart
can show the GDP of different nations for a given year.
📌
3. Pie
Charts
Used to show
proportions, such as budget allocation, sectoral contribution to GDP, or
sources of government revenue.
Example:
Government Expenditure Breakdown
A pie chart
can depict how a government allocates its budget across sectors like
healthcare, education, defense, and infrastructure.
📌
4.
Scatter Plots
Used to
determine correlations between two variables, such as inflation and
unemployment or education level and income.
Example:
Relationship Between Education and Income
A scatter
plot can show how higher education levels correlate with higher income.
📌
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