Question from the Next.js test

Here is a code snippet for a home page in Page Router.

// pages/index.js
import Link from 'next/link';

export default function Home() {
  return (
    <div>
      <Link href="/about">
        <a>About Us</a>
      </Link>
    </div>
  );
}

How does the Next.js Link component work in this example?