a. earn more interest on their capital costs. b. reduce capital costs to zero. c. reduce labor costs. d. increase the time period over which assets are depreciated.
3. If corporations maximize profits, the short-run incidence of a tax on its profits will be borne by:
a. consumers. b. all investors. c. corporate shareholders. d. workers.
4. Assuming that corporations maximize profits and investors seek to maximize the return to their investments, the long-run impact of a corporate income tax is to:
a. reduce the incomes of corporate shareholders only.