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This occurs due to a sudden "cut-off" or suspension, or release of voltage. Sometimes this can even cause a breaker to trip, or a GFI unit to trip, due to the sudden spike.

A2.) As a magnetic field collapses it induces currents in conductors nearby.

The faster the field collapses the higher the voltage.

This applies to inductive circuits. Although an inductor (coil) may not be physically present in any particular circuit, there is always inductance present, by the very wires themselves.

All electrical circuits have reactive components - parts of the circuit that hold charge, such as inductors and capacitors. When switching these elements out, the charge they are holding cannot instantly go to zero; it's released in the form of a spike. When switching these elements into a circuit, a sag can result due to these elements attempting to absorb power. Switching in can also result in spikes due to the capacitive and reactive elements creating a "tank" circuit (the voltage will sag slightly, then spike). At their resonant frequency, the reactive and capacitive elements will cause voltages to spike signficantly (for more information, look up LC tank circuits). Similarly, switching out can result in the trapped energy between capacitive and reactive elements to pass back and forth at a resonant frequency, spiking the voltage.

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