According to the text, an arrangement that consists of people who exercise an effective monopoly in the use of physical coercion in a given geographical area is known as

The state

Explanation:

The state is basically refers to the community in which the people living under the unified or combine political system. The word state is comes from the Latin word which means condition of the country.

The state is defined as the arrangement of the effective monopoly by using the physical coercion and it consist of the territory and people and in the specific geographical area.

Therefore, The state is the correct answer.  

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