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The ladder consists of 5 steps: 1 is the Local density approximation (LDA), 2 holds the generalized gradient approximation (GGA) which adds refinement, 3 contains meta-GGA and is in developement, 4 treats exchange exactly and 5 refines correlation by evaluating a part of it exactly. This ladder is a method to improve the XC functions, by adding parts that are calculated exactly.
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