Assume that the representative individual has the specific utility function:

U(c,n,mh) = U(c+mh −h(n))

where c is the purchase of commodities, n is the supply of labor, mh is real balances held by the individual, and h(n) represents the dislike for work or the loss of leisure due to labor supplied, with ∂h/∂n > 0 and ∂2h/∂n2 <