The nonlabor income of households will increase, causing consumption to increase and labor supply to decrease, if the government

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If the corporate profits tax is decreased, businesses will have more after-tax income which may lead to higher dividends or increased investment, both of which would increase the nonlabor income of households. This increase in nonlabor income would lead to an increase in consumption and a decrease in labor supply as households would have less incentive to work.

The Nonlabor Income of Households Will Increase, Causing Consumption to Increase