Question

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.

Answer 1

The revenue that the Spain government gained from tariffs and the revenue gained from income tax compare as given by: Option d. the government will earn €49.7616 billion more from income tax than from tariffs.

How to find the percentage from the total value?

Suppose the value of which a thing is expressed in percentage is "a'

Suppose the percent that considered thing is of "a" is b%

Then since percent shows per 100 (since cent means 100), thus we will first divide the whole part in 100 parts and then we multiply it with b so that we collect b items per 100 items(that is exactly what b per cent means).

Thus, that thing in number is

$\dfrac{a}{100} \times b$

For this case, we have these information:

• Import amount = €290.85 billion
• Tariff on import = 18% on import amount
• Export amount =  €200.13 billion
• Tariff on export = 7% on export amount
• Total people in Spain = 22.85 million

• Each person's average salary = €24,200 annually
• Tax on income = 21%

Calculating the earnings from tariffs and income tax:

• Earning from imports = 18% of €290.85 billion = $\dfrac{290.85 \times 10^9}{100} \times 18 = 52.353 \times 10^9$ = €52.353 billion

• Earning from exports = 7% of €200.13 billion = $\dfrac{200.13 \times 10^9}{100} \times 7 = 14.0091 \times 10^9$ = €14.0091 billion

• Total income earned by 22.85 million people = $22.85 \times 10^6 \times 24200 = 552.97 \times 10^9 \ \: \rm (in \: euros)$.

Tax generated from income = 21% of €552970 =

$\dfrac{552.97 \times 10^9}{100}\times 21 = 116.1237 \: \rm billion \: euros$

Earning from tariffs = 52.353 billion + 14.0091 billion = 66.3621 billion

Difference in earning from income tax and tariffs is:

116.1237 billion - 66.3621 billion = 49.7616 billion euros.

Thus, the revenue that the Spain government gained from tariffs and the revenue gained from income tax compare as given by: Option d. the government will earn €49.7616 billion more from income tax than from tariffs.

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