Virtual memory allows programs to access memory beyond the available physical memory by storing inactive memory pages on disk. This separation of physical and virtual memory makes programming easier and allows memory to be shared between processes. When a program requests a page not in memory, demand paging loads it from disk. If no frames are available, page replacement writes the contents of an unused frame to disk to free it for the requested page. Thrashing occurs when too many pages are continuously replaced from disk due to insufficient memory, degrading system performance.
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