I am trying to do a scatterplot to see the relationship between literacy and baby mortality. How do I know if literacy is my X axis and baby mortality is my Y axis, or the reverse? How do I determine what goes in the X axis and the Y axis?
If you have a variable you see as "explanatory" and the other one as the thing being explained, then one (very common) convention is to put the explanatory variable on the x-axis and the thing being explained by it on the y-axis.
So, for example, you may be viewing the relationship between literacy and mortality as potentially causal (and thus, clearly explanatory) in that greater literacy might lead to lower mortality.
In that case it would be common to put mortality on the y-axis and literacy on the x-axis.
But it's also possible to conceive of them the other way around (high infant mortality might well affect literacy rates), or with neither being explanatory of the other.
In some cases, if one variable is 'fixed' and the other is 'random', the more common convention is that random one tends to go on the y-axis of the plot.
In some areas the conventions may tend to be flipped around; this is simply the most widespread.
Any x-y scatter plot is relevant only to the end user (pretty much what whuber said). In general, the x-axis is the variable (cause) and the y-axis is the response (effect). In your case, I would suggest that literacy is a variable that affects baby mortality, so I would put literacy on the X and mortality on the Y.