Fiscal and Monetary Policies play important role in moti~alion the most
of economic activities and economic development in Egypt, so the objective of
the study is to explore the role of economic variables in performance and
efficiency of the tools of these two polices, so the General Equilibrium
Madelon National Level in Egypt was estimated, the study applied
liverpool model by Simultaneous Equali<:ms System. according to Jerry
Hausman method of Full Information Maximum Likelihood (FIML) Also the study used simple linear trend regression for achieving the
objective, and some used the tests of detecting some econometric problems,
i.e., Autocorrelation ,i.e., "Box-Pierce-Ljung Test and Breusch-Pagan Test"
Heteroscedasticity, "Engel Test", Non-Normality ot the error ,i.e., "Jarque-
Bera Test" and Multicollinearity. On the other hand Maximum Likelihood
Estimation (MLE) was applied to maximize the Log Likelihood Function (LLF1,
due to Beacn-Mackinnon method. Engel's autoregressive conditional
heteroscedasticity method (ARCH), and Extended Box-Cox Regression
method, and Ordinary Ridge Regression. Finally the data were collected from
different sources to cover the period (1980-2000). Results of the study were consistent with the economic theory, and
showed the effectiveness of fiscal policy as a result of the effect of
government expenditure on increasing gross national product, also the
increasing in taxes led to decreasing the consumption. One the other hand
monetary policy has no effect as a result to inelastic and the weakness of
money demand and investment with respect to interest rate. Recommendations of the study are concerning applying expanded
monetary policy to reflect increasing money supply and decreasing interest
rate. these changes will lead to increasing gross domestic product. labor, and
consumption. Also expanding fiscal polley will reflect decreasing taxes.