The Government Increases the Corporate Profits Tax

The government increases the corporate profits tax. As a result, corporate profits decrease. This will

A) have no effect on households.
B) decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease.
C) decrease the nonlabor income of households, causing consumption to decrease and labor supply to increase.
D) decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease or increase depending on the relative magnitude of the income and substitution effects.