Classical economics is the original school of economic thought first developed by Adam Smith (Wealth of Nations, 1777). The Neoclassical Growth Theory is an economic model of growth that outlines how a steady economic growth rate results when three economic forces come into play: labor, capital, and technology. The Classical School and Neo-Classical School differed in that the Classical School held that people had complete freewill and the Neo-Classical School felt that if a person had freewill, but not absolute free will. 2.5. Paper-II.Classical and neo-classical critical theories Unit-1:Classical Theory & Criticism 1.1 Definition 1.1.1Relevance of Classical Criticism 1.2 Origin and development of criticism 1. 2.6. The key difference between classical and neo classical theory is that the classical theory assumes that a worker’s satisfaction is based only on physical and economic needs, whereas the neoclassical theory considers not only physical and economic needs, but also the job satisfaction, and other social needs.. Leeds Beckett University. Neoclassical economics focus on how individuals operate within an economy. “Neo-Marxism” isn’t really one single ideology, but more of a reevaluation of Marxist ideology. Following are the major points of distinction between Classical Theory and Neo-classical Theory: In Classical Theory, it is the difference in the technology that determines the position of trade. It lay out many principles of economics that were then to be built on by the neo-classical school. 2.4. With this, the production of goods and services is the prime focus of economic analysis. Neo-classical economic theory puts ‘man’ as a rational human being at the heart of the economic system, extrapolating the functions of the economy based on optimised behaviour of rational, well-informed individuals trading with one in another in what is effectively a barter system (which as I’m sure we all know by now, never actually existed). (ii) Optimum Use of Resources – Sound organization helps in Obtaining the optimum use of technical and human resources. Concepts as Universals 1. 2.3 Concepts as Semantic Values 1. Differences between Classical Theory and Neo-classical Theory inadequate organization may not only discourage but actually preclude effective administration. Neoclassical Economics vs. Particulars – Classical vs Neoclassical economic theory Classical economics: Neoclassical economics: Analysis: Classical economics focus on what makes an economy expand and contract. Classical Economics. It includes the work of Adam Smith, David Ricardo, and many other economists. Ans. 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