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Memory is usually a term that refers to RAM or Random Access Memory which is always located inside your computer.

If you are referring to Hard Drives, an internal Hard Drive is located inside of your computer and connected directly to the motherboard by a short cable. External hard drives are not mounted inside the computer's case (They will often sit on top of the tower [CPU] or on your desktop) and are typically connected via Firewire, USB, or SCSI cables. Some External hard drives require an additional AC adapter to connect to a wall outlet for power while others will revieve power through their USB cable from the host computer.

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