The slope of a vertical straight line is infinity

Refer to Figure 10-1. Which of the following is consistent with the graph depicted above?

A) Technological change increases the profitability of new investment. B) Households become spendthrifts and begin to save less. C) An expected recession decreases the profitability of new investment. D) The government runs a budget surplus.

Economic theory and history indicate that open elections and democratically elected governments

a. are unique in their ability to produce good economic institutions. b. must be accompanied by economic institutions that will allocate resources efficiently, or otherwise democratic institutions will not survive. c. reflect only transactions that are based on mutual agreement and voluntary exchange. d. are unable to guarantee either the emergence or continuation of economic institutions and policies that will encourage productive behavior.