Caching improves performance by storing data temporarily so repeated requests do not need to fetch data from the original source every time. When a request arrives, the system checks if the data is in cache. If yes, it returns the cached data quickly. If no, it fetches the data from the source, stores it in cache, then returns it. This process reduces response time and load on the source. The execution table shows steps where data is fetched, cached, and served, highlighting how response time improves after caching. Key moments clarify why response time changes and what happens when data is not cached. The visual quiz tests understanding of these steps.