What are these buttons for?

What are does the green yellow and red buttons do on each Window?
This is really confusing me....

The red X should quit the application if it is the main window (and there are no other windows for that app open).
That's not how Macs work. With a few exceptions, when you close the last window for a program, the program is not quit - it remains running.
That's been the Mac 'way' for a long, long time, and was very useful when Multi-Finder first appeared in OS 5 (in the late 80's). With older, slow machines it made quite a difference in speed to keep the program running even when it was not in use. Today's machines are a lot faster, but there is still a noticeable difference between switching to an already-running app and opening a new document for it (or just double-clicking one of its documents) versus waiting for the program to reload before it can be used again.

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