An application is a piece of software that helps you carry out a particular task. It could be something that came with OS, such as ITunes or it could be something that you have installed yourself, such as Photoshop or VectorWorks.
Applications have their own folder which can be found in the hard drive - they can however be stored elsewhere, if wished.

If you regularly use a particular application you can drag its icon onto the Dock for quick access.

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