Question

The government reduces the corporate profit tax. As a result, corporate profits increase. This will _____ the non labor income of households, causing consumption to _____ and labor supply to ______

Answer 1

this will increase the nonlabor income of households, causing consumption to increase and labor supply to increase

Explanation: due to a reduction in the corporate profits tax, a larger amount of salary will be paid to the nonlabor sector hence there is a rise in the income of nonlabor, as an increase in income their consumption will also increase, people, would like to work in different company and labor supply will also increase.