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 ________ profits in the noncorporate sector, but ________ profits in the corporate sector.

A. decrease; increase
B. increase; decrease
C. not change; not change
D. not change; decrease


Answer: D

Economics

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