Take a look at the sentence again:
The students who have Mr. Sebacher for World Literature believe that their
professor reads Homer, Dante, and Shakespeare all evening. The reality is
that Mr. Sebacher __________ on the couch, eats corn chips, and channel
surfs until midnight.
Mr. Sebacher rests on the couch. Thus, you need a form of lie. Since the sentence is present tense, you need the simple present form. Consult the table below or review the rules.
Infinitive | Definition | Simple Present | Simple Past | Past Participle | Present Participle |
to lay | to put something down | lay(s) | laid | laid | laying |
to lie | to rest or recline | lie(s) | lay | lain | lying |