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Sleep deprivation can lead to a range of cognitive, psychological, and physiological issues, one of which is psychosis. When an individual does not get sufficient sleep, their brain struggles to function normally, which can manifest in various forms, including hallucinations and delusions. These symptoms may arise due to the brain's impaired ability to process information and maintain emotional regulation. In extreme cases, chronic sleep deprivation can create a state similar to psychosis, where the person may lose touch with reality.

The other responses indicate outcomes that do not align with the known effects of sleep deprivation. For example, panic attacks can occur but are not a direct or universally recognized consequence of sleep deprivation. Memory improvement is counterintuitive, as sleep is crucial for memory consolidation; thus, deprivation usually results in memory impairment rather than improvement. Lastly, increased energy levels contradict the typical feeling of exhaustion and fatigue associated with insufficient sleep. Therefore, psychosis stands out as a direct consequence that is supported by research on the effects of sleep deprivation on mental health.