How can transposons lead to gene activation or inactivation?

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"Transposons are sequences of DNA that can move around to different positions within the genome of a single cell" (Wikipedia).  The DNA uses the genetic code as a "recipe" for proteins made through transcription and translation.  Specifically, the DNA base pairs provide the code that the RNA "reads" to make the proteins.  So if a DNA molecule originally codes for the amino acids leucine, proline, lysine, serine, glycine, and valine to make a protien,  A transposon could alter the DNA to code for leucine, proline, lysine, leucine, proline, lysine.  This would alter the composition of the protein because it would not be made of the same amino acids.  If the protein is not made of the same amino acids, it may not be able to perform it's job correctly, so the gene is said to be inactivated.  If, however, the protein performs a different function or a protein is made from what was "junk DNA" a gene is said to be activated.

Most of the time if a transposon is inserted into a functional gene, that gene will be inactivated.  If there are multiple copies of a gene sequence added on to a DNA strand it causes unequal crossing over and hinders chromosomal pairing in mitosis.  Some diseases such as hemophilia A and B and Duchenne muscular dystrophy are linked to transposons.

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