GENERAL KNOWLEDGE

Detailed explanation-1: -The Neoclassical Theory gained importance specifically in the rise of the “Hawthorne Experiment” at Western Electric Company by the father of human relation management named Elton Mayo from 1924 to 1932.

Detailed explanation-2: -Neoclassical economics historically dominated macroeconomics and, together with Keynesian economics, formed the neoclassical synthesis which dominated mainstream economics as “neo-Keynesian economics” from the 1950s to the 1970s.

Detailed explanation-3: -Robert Solow and Trevor Swan first introduced the neoclassical growth theory in 1956. The theory states that economic growth is the result of three factors-labor, capital, and technology.

Detailed explanation-4: -Neoclassical theory suggests that the firm’s level of investment should depend only on its perceived investment opportunities measured by the firm’s marginal Tobin’s q, where marginal Tobin’s q is the value of the investment opportunity divided by the cost of the required investment.