Question

How could a return of the U.S. population growth rate to its previous level reduce the disinflationary effect of secular stagnation?

Short answer

This has improved the nation's overall potential (GDP).

Step-by-step solution

Human capacity.

A production possibilities curve can be linked to the economy's long-run aggregate supply curve. The nation's output potential is determined by its long-run aggregate supply. The nation's production potential curve has shifted outside with the addition of natural resources and human capital to the economy.

Productive capacity.

This means that the nation's production capability is expanded with a fresh set of resources. Because the long run aggregate supply curve captures this capacity, the $LRAS$curve shifts to the right. This has increased the country's overall potential $\left(GDP\right)$.