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When electric current flows through a coil of wire it generates a magnetic field. Variable current generates variable magnetic field. When a second coil is placed in a variable magnetic field of the first one an electric current is generated in it. Magnetic nature of the connection between two coils can be proved by the fact that it takes place only when the second coil is aligned with the magnetic field of the first one. Magnetic field of a coil can be traced with a compass.

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Q: How can a change in voltage in a coil of wire be transferred to a neighboring coil of wire without physical contact?
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