Monetarists believed for a period of time that the velocity of money was stable within a country. However, with financial innovation, the velocity began shifting around erratically after 1980. As would be expected, the velocity of money is different across countries depending upon the sophistication of their financial systems—velocity of money tends to be higher in countries with developed financial systems. The following table provides money supply and GDP information in 2016 for six countries.

a. Calculate the velocity of money for each of the countries. The following table shows GDP per capita for each of these countries in 2016 in US. dollars.
Country Nominal GDP per capita (U.S. dollars)
Egypt | $3,685 South Korea | 27,539 Thailand | 5,899 United States | 57,436 Kenya | 1,516 India | 1,723 Data from: IME.

b. Rank the countries in descending order of per capita GDP and velocity of money. Do wealthy countries or poor countries tend to “turn over” their money more times per year? Would you expect wealthy countries to have more sophisticated financial systems?