This circuit shows the principle behind a reaidual current device (RCD). A toroid compares the current in both the active, and the neutral wire.
The currents should match exactly (kirchoffs current law). If current is 'leaking' from the circuit via an alternate path to ground, which bypasses the RCD to the earth at the transformer, it will be detected. The residual current will activate a solenoid and trip the RCD.
The 10k resistor simulates a person touching a live wire, causing an earth leakage current to bypass the RCD, creating a residual current in the RCD.
Note that if you touch both wires at the same time, there will be no earth leakage and the RCD will see no abnormalities.
