Use the following data to work Problems 1 to 4:

The following events have occurred in the history of the United States:

A deep recession hits the world economy.

The world oil price rises sharply.

U.S. businesses expect future profits to fall.

1. Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.

2. Explain the separate effects of each event on U.S. real GDP and the price level, starting from a position of long-run equilibrium.

3. Explain the combined effects of these events on U.S. real GDP and the price level, starting from a position of long-run equilibrium.

4. Describe what a classical macroeconomist, a Keynesian, and a monetarist would want to do in response to each of the events listed above.

5. How do monetary financial institutions create liquidity, pool risk, lower the cost of borrowing, and lower the cost of monitoring borrowers?

I need clear and not too much short explanation. 5th one is the most important question. Thanks in advance..