Random Acccess Memory or RAM is a layer of computer memory that acts between the long term storage of the hard drive and the CPU, it is used to store data that is being used currently by a the operating system or a program such as a web browser, word processor or video game.
RAM is an order of magnitude faster than hard drives at returning requested data both in terms of latency (how fast data can be returned) and bandwidth (how much data can be read per second). Using this faster storage medium in an intermediary position makes significant performance increases for the whole system.