Answer:
E. raises the price of the good in H and lowers it in F.
Step-by-step explanation:
Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.
Economic integration can be defined as a strategic trade arrangement between countries to eliminate or mitigate trade barriers, as well as coordinate fiscal and monetary policy among its members.
There are different types of market or trade bloc used in economic integration and these includes;
I. Customs union.
II. Free trade area.
III. Common market.
IV. Political union.
VI. Economic union.
Tariffs can be defined as government imposed levies, fees or duties on goods that are imported into or exported out of a country.
Generally, tariffs can reduce both the volume of exports and imports in a country. In order to generate revenues, domestic government make use of tariffs while quotas do not generate any revenue for them.
Hence, importing a good from country F into (large) country H with an imposition of a tariff in country H would raise the price of the good in H (import) and lowers it in F (export), when compared to a free trade situation.
A free trade area (zone) can be defined as an economic area wherein goods are exported or imported from one country to another without being subjected to normal trade laws such as quotas, bureaucratic requirements and tariffs of the country. Thus, a free trade area (zone) stimulates or enhances foreign trade, investment and globalization.