We consider a screened Coulomb interaction between electrons in graphene and determine their dynamic response functions, such as a longitudinal and a transverse electric conductivity and a polarization function and compare them to the corresponding quantities in the short-range interaction model. The calculations are performed to all orders for short-range interaction by taking into account the self-energy renormalization of the electron velocity and using a ladder approximation to account for the vertex corrections, ensuring that the Ward identity (charge conservation law) is satisfied. Our findings predict a resonant response of interacting electron-hole pairs at a particular frequency below the threshold $qv=omega$ and further predict an instability for sufficiently strong interactions.
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