A sentence with quantifier-free is preserved by a union of an embedding chain: a tuple occurs at some stage, a witness exists at that stage, and quantifier-free formulas are preserved in the union. Thus every forall-exists axiomatized theory is inductive.
Conversely, let contain all forall-exists consequences of and suppose . The diagram-and-compactness sandwich lemma says that one can construct
where every and every . For completeness, the first extension is obtained by adding to the diagram of together with all universal formulas over true there. A finite inconsistency would give a forall-exists consequence of false in . The resulting extension embeds into an elementary extension by the method of diagrams.
The form an embedding chain and have the same union as the . By the assumed preservation, ; by the elementary chain theorem, . Hence , so . The two theories are equivalent, proving the characterization.

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