Which theorem states that exchange rates will adjust until the prices of goods in different countries approximate one another?

Question

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Purchasing power parity (PPP) is a theory that suggests that in the long run, exchange rates between countries should be such that the prices of similar goods and services are equalized in both countries. This means that if a good costs more in one country than in another, the exchange rate between the two currencies should adjust so that it becomes relatively cheaper to buy that good in the more expensive country. The theory is based on the idea that arbitrage (buying and selling of goods across borders) will eventually equalize prices and reduce any price differences that exist between countries.

Which Theorem States That Exchange Rates Will Adjust Until the Prices