When a client sends a request, nginx first checks if the response is in its cache. If the cache has the response (cache hit), nginx returns it immediately, making the response very fast. If the cache does not have it (cache miss), nginx fetches the response from the backend server, which takes more time. After fetching, nginx stores the response in cache for future requests. This process speeds up repeated requests by avoiding backend fetches. The example nginx config uses proxy_cache to enable caching. The execution table shows the cache miss on first request with slow response, and cache hit on second request with fast response. Variables track the cached content and response times. Understanding these steps helps see why caching improves response times.