1) I presume busy wait you mean the program displays something like the hourglass you see in browsers where the program continues to do something. The only purpose of the hourglass is to let the user know that the program is doing something that may take some time to complete. The block wait is like the message "Press any key to continue", where the program is actually stopped until you press a key to make it continue. When to use which one all depends on the program and what you the programmer want it to do.
2: >>Are there situations where the execution context of the process may have to be saved
MS-DOS 6.X and older is considerded a "uniprogramming system". The answer is yes because it too has hardware and software interrupts which, as its name implies, interrupts the execution of the main program for a little while to do something else, then when done the interrupt handler will return resume the main program where it left off. This is not a scheduled task switch as it is in multi-programming enviroments such as *nix and MS-Windows.
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