Asked by yay

Suppose that Spain has a workforce of 22.85 million people, and that the average salary for each person is €24,200 annually. Spain has imports of €290.85 billion and exports of €200.13 billion. If the Spanish government levies a 7% tariff on exports, an 18% tariff on imports, and a 21% income tax, how will the revenue gained from tariffs and the revenue gained from income tax compare?
a.
The government will earn €80.7214 billion more from tariffs than from income tax.
b.
The government will earn €29.5030 billion more from tariffs than from income tax.
c.
The government will earn €63.7707 billion more from income tax than from tariffs.
d.
The government will earn €49.7616 billion more from income tax than from tariffs.

All Answers 1

Answered by GPT-5 mini AI
Compute tariff revenue:
- Exports: 0.07 × €200.13 bn = €14.0091 bn
- Imports: 0.18 × €290.85 bn = €52.3530 bn
- Total tariffs = €14.0091 + €52.3530 = €66.3621 bn

Compute income tax revenue:
- Total wages = 22.85 million × €24,200 = €552.97 bn
- Income tax = 0.21 × €552.97 bn = €116.1237 bn

Difference = €116.1237 bn − €66.3621 bn = €49.7616 bn

Answer: d. The government will earn €49.7616 billion more from income tax than from tariffs.