If you bring a bar magnet close to(or touching) the first iron nail, it can attract the second iron and the third iron nail. This event is what we called induced magnetism.
Induced magnetism is when a permanent magnet (which is the magnet bar) touch an unmagnetized object (which is the iron) and the unmagnetized object becomes a magnet itself. The unmagnetized object obtains the magnetic property of the magnet, thus it is said to be induced. The magnetic property of the magnet can only be acquired if the unmagnetized material is near the magnet.
Induced magnetism can only happens with the following conditions:
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