In fact may be physically fragmented and may even overflow on to disk storage. Systems that use this technique make programming of large applications easier and use real physical memory (e.g. RAM) more efficiently than those without virtual memory.
Note that "virtual memory" is not just "using disk space to extend physical memory size". Extending memory is a normal consequence of using virtual memory techniques, but can be done by other means such as overlays or swapping programs and their data completely out to disk while they are inactive.
The definition of "virtual memory" is based on tricking programs into thinking they are using large blocks of contiguous addresses.
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