Abstract: This research work has been undertaken with a view to ascertaining the relative effectiveness of monetary and fiscal policies in Bangladesh economy analyzing the data for the period from 1973-74 to 1999-2000. The results of the study indicates that in our economy fiscal policy is more effective and faster as well than monetary policy. Thus the economist`s statements regarding the relative effectiveness of monetary and fiscal policy has been proved true in the case of our country. The same results are expected to hold in the case of all countries like that of ours.