Suppose a closed economy is currently producing below its full potential due to an adverse demand

side shock from the goods market. According to the AS-AD model, if the policy makers want to move

the economy more rapidly back to full employment output and, at the same time, wants to keep

investment stable (or near to) it's initial level, which of the following policy (policies) would achieve

the goals?

Policy 1 - An increase in transfer payments to households.

Policy 2 - A subsidy to business investment.

Policy 3 - An increase in open market purchases.

Explain and support your answer by ONE AS-AD diagram.