Assume that both the corporate and noncorporate sectors are in long-run equilibrium before the imposition of a corporate profits tax. In the short run, the imposition of a corporate profits tax will
A. not change profits in the corporate sector, but increase profits in the noncorporate sector.
B. not change profits in the noncorporate sector, but decrease profits in the corporate sector.
C. decrease profits in both the corporate and noncorporate sectors.
D. not change profits in either the corporate or the noncorporate sector.
Answer: B
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