Scenario 34-2. the following facts apply to a small, imaginary economy. consumption spending is $5,200 when income is $8,000. consumption spending is $5,536 when income is $8,400. refer to scenario 34-2. in response to which of the following events could aggregate demand increase by $1,500?
a. a stock-market boom increases households’ wealth by $300, and there is an operative crowding-out effect.
b. a stock-market boom increases households’ wealth by $275, and there is an operative crowding-out effect.
c. an economic boom overseas increases the demand for u. s. net exports by $240, and there is no crowding-out effect.
d. aggregate demand could increase by $1,500 in response to any of these events.

Paar corporation bought 100 percent of kimmel, inc., on january 1, 2012. on that date, paar’s equipment (10-year life) has a book value of $420,000 but a fair value of $520,000. kimmel has equipment (10-year life) with a book value of $272,000 but a fair value of $400,000. paar uses the equity method to record its investment in kimmel. on december 31, 2014, paar has equipment with a book value of $294,000 but a fair value of $445,200. kimmel has equipment with a book value of $190,400 but a fair value of $357,000. the consolidated balance for the equipment account as of december 31, 2014 is $574,000. what would be the impact on consolidated balance for the equipment account as of december 31, 2014 if the parent had applied the initial value method rather than the equity method? the balance in the consolidated equipment account cannot be determined for the initial value method using the information given. the consolidated equipment account would have a higher reported balance. the consolidated equipment account would have a lower reported balance. no effect: the method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.