Due to the marginal propensity to consume, not all income will result in consumption. Since consumption will be less than expected income, actual income will ultimately be less than expected income. To understand this concept you will have to suspend thinking about an individual, and instead think in terms of income and consumption of millions of people. The fact that actual income is less than expected income will change peoples behavior. The economic model will drive towards a state of balance in consumption.
Economic equilibrium occurs where the two lines intersect.
To make the model more complete we need to add business activity and the government. These additions do not change the basic logic of the model, it only makes it a little more complex. Businesses investments create more consumption and as such raise income. Government pretty much does the same, it increases actual income. Investments and government spending creates jobs and work for individuals, as such we draw the conclusion that these actions increase actual income of people.