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CPU or Central Processing Unit is the part of the computer, where all the calculations take place. It is often referred to as a processor. It is the most important part of the computer.
The CPU consists of two parts. The first one is called the Arithmetic Logic Unit or just ALU, and it is the part of the processor which performs arithmetic and logical operations. The second part is called a Control Unit or just CU, and it is the part that decodes the instructions received from the memory and executes them.
On personal computers, the CPU is called a microprocessor, because it is housed only on a single chip.