Final answer:
The entertainment industry affects the economy primarily through increased consumer spending. It contributes to economic growth by creating jobs and fostering innovation in various technological fields but does not necessarily lead to decreased production rates or political instability.
Step-by-step explanation:
The entertainment industry has notably contributed to economic changes through increased consumer spending, as people have more disposable income to spend on leisure activities such as movies, concerts, and sports events. This was especially evident during the 1920s when rising earnings generated more disposable income, leading to technological innovations and booming popularity of various forms of entertainment. The industry also affects the economy by creating jobs and fostering innovation in related fields such as advertising and technology.
However, it's important to note that while globalization, spurred by the entertainment industry, can lead to cultural homogenization, it is not directly linked to decreased production rates or political instability. In fact, globalization through entertainment can often increase production in the sector and offer a form of cultural exchange that might lead to political and social discourse, but not inherently to instability.