The government reduces the corporate profits tax. As a result, corporate profits increase.
This will
A. increase the nonlabor income of households, causing consumption to increase and labor supply to increase.
B. have no effect on households.
C. increase the nonlabor income of households, causing consumption to increase and labor supply to increase or decrease depending on the relative magnitude of the income and substitution effects.
â—» D. increase the nonlabor income of households, causing consumption to increase and labor supply to decrease.
The government reduces the corporate profits tax. As a result, corporate profits increase
This will
O A. increase the nonlabor income of households, causing consumption to increase and labor supply to increase
O B.have no effect on households. O C. increase the nonlabor income of households, causing consumption to increase and labor supply to increase or decrease depending on the relative magnitude of the income and substitution effects. O D.increase the nonlabor income of households, causing consumption to increase and labor supply to decrease