snow removal for business in Butler county is now provided b

snow removal for business in Butler county is now provided by the county government. Suppose a new regime enters office and privatizes snow removal. Each business is charged for snow removal by a new private company. Assume that this charge is exactly same as the tax cut afforded by privatization. Moreover, suppose the private company does exactly the same quality job in snow removal as the county did, then the GDP will increase, not change or decrease

Solution

GDP will not change.

Explanation:-  GDP refers to money value of final goods and services produced in a country during a year and it is inclusive of consumption of fixed capital in an year. Snow removal by a new private company will not affect the GDP.