The graph of the equation y = ab^x represents an exponential function where 'a' is a constant that determines the initial value and 'b' is the base that indicates the growth or decay rate. This type of graph shows how rapidly a quantity increases or decreases over time, creating a distinctive curve that either rises steeply or falls gradually based on the value of 'b'. Understanding the characteristics of this graph, including its asymptotic behavior and intercepts, is crucial for analyzing exponential relationships in various contexts.