Electrical Machines
In an alternator, voltage drops occurs in

  armature resistance, leakage reactance, armature reaction and earth connection.
  armature resistance, leakage reactance and armature reaction.
  armature resistance only.
  armature resistance and leakage reactance.

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Electrical Machines
Compensating windings are used in DC generators

None of these
  to neutralize the cross magnetizing effect of the armature reaction.
  mainly to reduce the eddy currents by providing local short circuit.
  to provide path for the circulation of cooling air.

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