The study examined the effect of fiscal and monetary policies on selected macroeconomic variables in Nigeria using the Auto-regressive Distributed Lag (ADL) bound testing econometric technique from 1981 to 2018. Specifically, the study sought to examine the effects of fiscal and monetary policies on selected macroeconomic variables namely, Real Gross Domestic Product, rate of Inflation, rate of Unemployment and Balance of payments in Nigeria and how these policies interact to influence these macroeconomic variables. The study introduced the Transcendental Logarithm Function (TLF). The findings showed that fiscal policy affected economic growth, rate of inflation, rate of unemployment and balance of payment positive and significantly in both the short and long run; monetary policy affected economic growth, rate of inflation, rate of unemployment and balance of payment positive and significantly in both the short and long run. Unfortunately, these policies have been counteractive in increasing growth, reducing inflation and unemployment and fostering a good balance of payment position. It was recommended amongst other things that government should increase its expenditures to create infrastructures that will productively engage the large number of people who are willing and able to work; the Central Bank of Nigeria (CBN), should formulate and implement sound monetary regulations especially as regards money supply. This will keep the rate of inflation in check; and stimulate the economy positively.