Which concept states that real rates are equal across countries?

Question

Quizplus · Accepted Answer

The International Fisher effect states that the difference in the nominal interest rates between two countries is equal to the expected change in the exchange rate between their currencies. This implies that the real interest rates (adjusting for expected inflation) are equal across countries, assuming that the exchange rate movements will offset differences in interest rates due to inflation differentials.

Which Concept States That Real Rates Are Equal Across Countries