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This lecture introduces the spatial criterion to distinguish between localized and distributed circuits by comparing the circuit size to the wavelength. It explains how the current behaves as waves in cables, the concept of wavelength, and the relationship between frequency, wavelength, and wave velocity. The instructor demonstrates how to calculate the wavelength and applies the criterion to determine the appropriate circuit theory for different frequencies, using the example of comparing a 2 cm resistor to wavelengths at 100 MHz, 1 GHz, and 10 GHz. The lecture concludes by discussing different types of electromagnetic components based on their dimensions relative to the wavelength.