Answer: 2. Federal system.
Central and state governments influence each other in a federal system. The federal system of government is one that combines both the central (or national government) and the state government (or local government). While the central government has authority over issues surrounding foreign policies and defense, the state government has a good amount of influence when it comes to other policy areas. This means that there are some instances where both systems of government influence each other from time to time.
The federal system of government finds the common ground between local affairs and national policies.