Interrupts allow external events to suspend and later resume processes running on a computer. They improve processor utilization by allowing the operating system to interrupt running processes to respond to external events like user input or I/O device completion. There are different types of interrupts including program-generated, timer, I/O, and hardware failure interrupts. When an interrupt occurs, the CPU saves its context and executes an interrupt handling routine that calls the appropriate interrupt service routine to handle the interrupt before resuming the original process.
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