A compass consists of a lightweight magnetised needle and one end of this needle always points towards the North. This is based on the "opposites attract" rule (north and south attract, south and south repel). As a result, the north end of the magnet is attracted to the Arctic pole which is actually a 'magnetic North'.
There is a difference between magnetic North and true North. True North which is at the North pole, is the geographical direction represented on maps and globes by lines of longitude. However, a compass does not direct you to the true North. The Earth's magnet is not aligned with the geographical poles and because of this, a compass points to the magnetic North. The difference between magnetic North and true (geographical) North is called the magnetic declination.
Unlike the true North, magnetic North does not remain constant because of the changes in the Earth's magnetism caused by the movement of Earth's inner core. Therefore, for accurate directions, a GPS is preferred over a compass since it uses satellite signals instead of the Earth's magnetic field.
References:
- Conger, C. (n.d.). Introduction to How to Find True North. HowStuffWorks "Adventure". Retrieved February 26, 2012, from http://adventure.howstuffworks.com/survival/wilderness/true-north.htm
- Nowikow, I. (2001) Physics : Concepts and Connections. Toronto/Vancouver, Canada: Irwin Publishing.
- The Earth is a Magnet . (n.d.). The Earth is a Magnet. Retrieved February 26, 2012, from http://www.worsleyschool.net/science/files/magnet/earth/asamagnet.html

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