The equilibrium level of income is determined at a point where savings and
investment are equal, i.e., S = 1. The given table and diagram illustrate the
determination:

Income (Y)	Consumption (C)	Saving (S) = Y - C	Investment (Rs. crores) (1)
0	50	-50	100
100	100	0	100
200	150	50	100
300	200	100	100
400	250	150	100

The table and diagram show that the equilibrium level of income is Rs.300
crores and at this point S(100) = I (100).
When savings exceed planned investment. It means that people are consuming less and thereby spending less. As a result, aggregate demand is less than aggregate supply. This will lead to the accumulation of unintended inventories with businessmen. To avoid further accumulation of inventories, businessmen will reduce production. Consequently, output, income, and employment will be reduced to the equilibrium level of income OY (~ 300 crores) is reached where S = I.