Quantitative interpretation and decision-making
- Syllabus
- 2026
- Topic
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- Level
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Learning objectives
Interpret graphs and charts as decision evidence
| Pass | Question to answer | Evidence produced |
|---|---|---|
| identity | what is measured, where, when and by which source? | correct variable and context |
| axes and encoding | what do axes, units, scale, colours, bars, lines or categories mean? | accurate reading rather than visual guess |
| pattern | what is the direction, size, peak, trough, turning point or ranking? | a quantified observation |
| comparison | compared with which year, group or benchmark? | difference, ratio or percentage change |
| decision link | which option/objective does the pattern support and through what mechanism? | evidence-based recommendation |
| limitation | what is missing or potentially misleading? | qualified judgement |
Use the structure claim → exact graph evidence → economic mechanism → decision. Example: 'Unemployment rose from 5% to 8% (3 percentage points), indicating spare labour; a training policy may be justified if the rise reflects structural mismatch.'
Check truncated axes, unequal time intervals, cumulative versus period values, nominal versus real data, and whether the graph shows levels, rates or percentage changes. These can change the conclusion.
A graph can show association, sequence and magnitude but does not by itself prove causation. A decision needs economic reasoning and, where possible, corroborating evidence.
Use economic data to justify a decision
| Data | Meaning/calculation | Decision signal and caution |
|---|---|---|
| unemployment rate | unemployed people ÷ labour force × 100 | high/rising rate may justify demand or training policy; distinguish cyclical, structural and seasonal causes |
| exports | value of domestically produced goods/services sold abroad | growth may support export industries, but compare volume and price/ currency effects |
| imports | value of foreign goods/services bought domestically | may indicate strong demand or input access, not automatically economic weakness |
| visible trade balance | exports of goods − imports of goods | positive is a goods surplus; negative is a goods deficit; it excludes services and income flows |
\text{visible trade balance}=\text{exports of goods}-\text{imports of goods}
Use a four-step chain: define the measure → calculate or compare on a consistent basis → identify the economic implication → select and qualify the decision. State exact units, dates and whether the change is absolute, percentage or percentage points.
Do not decide from one number alone. Compare over time, with a target or another economy, and combine related indicators—for example unemployment with vacancies/output, or trade balance with exchange rates and export competitiveness.
A visible trade deficit is not the same as a current-account deficit, and a lower unemployment rate is not automatically better if participation has fallen or job quality is weak.