The most accurate response regarding the effects of World War I on Indiana is: War propaganda created anti-immigrant sentiments.
During World War I, there was a significant increase in nationalistic sentiments and propaganda, which often targeted immigrants, particularly those from countries that were enemies of the United States. This led to increased tension and discrimination against certain immigrant communities in Indiana and across the country.
The other options are less accurate: Morgan's Raid was a Civil War event, industrialization in Indiana actually received a boost due to the war demand for materials, and many Hoosiers did serve in the military during the conflict.