This paper used graphically approach to examined the relative effect of monetary and fiscal policies under fixed and flexible exchange rate Today, monetary and fiscal policies are both commonly accorded prominent roles in the pursuit of macroeconomic stabilization in both developed and developing countries, but the relative importance of these policies have been a serious debate between the Keynesians and the monetarists. The monetarists believe that monetary policy exert greater impact on economic activity while the Keynesian believe that fiscal policy rather than the monetary policy exert greater influence on economic activity. Regardless of their proven effectiveness in some economies as policies that commands influence on economic activities, the two policies have not been adequately utilized in Nigeria. Having examined the effect of monetary and fiscal policies under fixed and flexible exchange rates, it was observed that though both regimes have some merits and demerits. But fiscal policy is effective in the period of fixed exchange rates than monetary policy. Similarly, monetary policy is more effective during a flexible exchange rate regime. Based on these facts, a country with a fixed exchange rate can, however, conduct a type of monetary policy: it can decide to change the level at which the exchange rate is fixed vis-a-vis devaluation, and revaluation. Therefore, the policy-makers should adopt the appropriate exchange rate system while dealing with external sector problems.