Going to the Dogs

question 76

Multiple Choice

Going to the Dogs
Demand for pet services is greatly increasing across the United States. In fact, Americans will spend nearly $44 billion dollars on their pets this year. Many American dog owners are seeking out "doggy day cares" that are more like a resort or spa than an ordinary kennel for their canine companion. Day care services for dogs now include toy rooms, outside play areas, doggie massages, treadmills, swimming pools, and cushy beds for nap time. Pet owners can watch their pets via a webcam, and some doggy day cares have a phone where owners can talk to their dogs when they feel their pets need to hear their voices. Rates vary from $20 to $45 a day per pet, depending on the amenities that the pet owner chooses.
-Refer to Going to the Dogs.For many dog owners,it may be hard to understand the difference between a traditional kennel and a dog day care,especially given the price differential.As a result,dog day cares may offer special low rates for first-time users in an effort to reduce which of the following issues concerning the rate of diffusion?

Definitions:

Crowding-out

A situation where increased public sector spending leads to a reduction in private sector spending.

Accelerator Effect

Refers to the phenomenon where an increase in national income results in a proportionally larger increase in investment spending due to expected higher demand for products.

Aggregate Demand

The sum of all demands for products and services in an economy, set at a particular price level and time period.

Aggregate Demand

Unified demand for all forms of goods and services in an economic landscape at a determined general price level throughout a certain time period.