Option 1 -> Full employment is a specific economic condition, not the determinant of output level.
Option 2 -> Excessive demand is an imbalance situation, not the equilibrium determinant.
Option 3 -> Marginal output is not a standard concept for determining overall output level.
Option 4 -> Equality of Income (Y) with Aggregate Demand (AD) represents macroeconomic equilibrium.
Hence, Equality of Income (Y) with Aggregate Demand (AD) -> In macroeconomic theory, the equilibrium level of output is determined where aggregate supply (represented by income Y) equals aggregate demand (AD). This is the fundamental equilibrium condition (Y = AD) where the economy is in balance - what is produced equals what is demanded. At this point, there is no tendency for output to change, making it the stable level of output in the economy. -> correct