Explanation
A normal uncharged piece of matter has equal numbers of positive and negative electric charges in each part of it, located close together, so no part of it has a net electric charge. The positive charges are the atoms' nuclei which are bound into the structure of matter and are not free to move. The negative charges are the atoms' electrons. In electrically conductive objects such as metals, some of the electrons are able to move freely about in the object.
When a charged object is brought near an uncharged, electrically conducting object, such as a piece of metal, the force of the nearby charge causes a separation of these charges. For example, if a positive charge is brought near the object (see picture at right), the electrons in the metal will be attracted toward it and move to the side of the object facing it. When the electrons move out of an area, they leave an unbalanced positive charge due to the nuclei. This results in a region of negative charge on the object nearest to the external charge, and a region of positive charge on the part away from it. These are called induced charges. If the external charge is negative, the polarity of the charged regions will be reversed.
Since this process is just a redistribution of the charges that were already in the object, it doesn't change the total charge on the object; it still has no net charge. This induction effect is reversible; if the nearby charge is removed, the attraction between the positive and negative internal charges cause them to intermingle again.
Read more about this topic: Electrostatic Induction
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