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The basic principle that rheostats use is Ohm's law, which states that current is inversely proportional to resistance for a given voltage. This means the current decreases as the resistance increases or it increases as the resistance decreases. Current enters the rheostat through one of its terminals, flows through the wire coil and contact, and exits through the other terminal. Rheostats do not have polarity and operate the same when the terminals are reversed. Three-terminal potentiometers can be used as rheostats by connecting the unused third terminal to the contact terminal.

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