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Circuit Earthing

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Neither, the truth is in-between. There are three prongs on typical electrical outlets, live, neutral, ground. Ground and neutral (in the US) are bound at the breaker box, but they are still separate circuits until that point. Neutral is the ground return point for live, but the 'earth ground' is removed from this so there is no voltage drop implied as might occur on the neutral line, basically all neutrals float higher than ground and the saftey ground is designed to not carry a load but to be a true reference (this doesn't always happen)

Outside of mains wiring live/neutral/earth can get even more complicated. It's not so cut and dry as you may be thinking.
 
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Earthing generally performs a function of equipotential bonding so you don;t get shocked when touching your microwave and the kitchen sink. It gets more complicated when you consider an outdoor pool.

It also performs a function as a reference voltage.

It performs the function of "protective ground" which is a path such that the case of a metal device isn't connected to the power grid.

It provides RFI protection to a circuit.

The subject is really complex.
 
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