In 1968, President Johnson and Congress Implemented a Temporary Surcharge

Multiple Choice

In 1968, President Johnson and Congress implemented a temporary surcharge on personal and corporate income taxes.What was the effect of this?

A) economic activity declined sharply and the economy entered a recession
B) consumption and investment spending declined significantly
C) households decreased their savings and aggregate demand was hardly affected at all
D) consumption and saving declined, while investment was not affected
E) both A and B