"If the Midwestern states experienced a wide-scale and prolonged drought, we could expect corn prices to rise sharply" is an example of demand-pull inflation and option D is correct.
What are Droughts?
Draught a situation that emerges due to less or no rainfall for consecutive years or seasons in a particular area where water is already less.
Demand pull inflation is the type of inflation in which the prices of a particular commodity rises due to increase in demand for the commodity in the market.
Corn is among the crops that needs less water for production and in a situation of drought corn can be produced but the demand for corn will also rise rapidly. The rising demand will pull the price of corn upward in the region which is effected by drought.
Therefore, the correct option is D, " cost pull inflation".
Learn more about droughts here:
https://brainly.com/question/26693108
