Equilibrium level of income is that level of income at which aggregate demand equals aggregate supply. (and planned savings equals planned investment)
The two different alternatives to reach at the equilibrium level of income are :
(i) Increase in Govt. Expenditure to pump more money in the system to increase demand. During the period of deficiency of demand, the Government should make large investments in public works like-construction of roads, bridges, buildings, railways, canals and provide free education and medical facilities although it may enlarge budget deficit. The aim is to give more money in the hands of people so that they should spend more.
(ii) Central bank should buy Govt. bonds and securities from commercial banks to increase cash stocks of banks for lending. By doing this money flow will increase in the economy. People will take loans from the banks to install new projects. More people will get jobs thus, income will increase, in turn, consumption will also increase and economy will move towards achieving equilibrium level of income.