Under quantity control, the monetary authorities fix the quantity of money and allow the markets to determine the corresponding equilibrium level of nominal prices. Under convertibility, the government fixes the nominal price of gold (for example) and leaves it to the banks and their customers to determine the corresponding equilibrium stocks of money and other liquid assets. From the standpoint of the government, the first is a “quantity-fixing, price-taking” and the second a “price-fixing, quantity-taking” strategy.
#