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.

You need to find 1) the revenue from income tax and 2) the revenue from tariffs and compare them.

1) The revenue from income tax is the total salary of all people multiplied by the income tax percent. Since there are 22.85 million people earning an average of €24,200, multiply these two numbers to find the total amount of salaries for the entire population. Then multiply by 21% (as 0.21) to find the total income tax the government collects.

2) To find the total tariff the government receives, multiply the amount of imports by the import tariff and multiply the amount of exports by the export tariff. Then add those products. Now you have the total tariff collect by the government.

Now compare the two numbers you got in parts 1) and 2).