How Does
Intake
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In order for the air conditioning system to cool the air, warm air must be presented to the unit. A split air conditioning system uses a fan inside the part of the unit located indoors to push air out and create a vacuum. Air intakes in other rooms take air in and move it to the outside portion of the unit after it passes through a filter. This is where it is cooled.
Outdoor Unit
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Once at the outdoor cooling unit, the air conditioner uses the same process that is used in a standard refrigerator. As the air is being pushed through, refrigerant is also in the process of making a cycle. It begins at the compressor as a cool lower pressure gas, which is squeezed and pressurized. This causes the refrigerant to heat up, becoming a hotter gas that then moves into the condenser. The condenser cools the gas, much the same way that a radiator cools a car. By the time it leaves the condenser, it is much cooler and has turned back into a liquid.
Evaporator
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From the condenser, the refrigerant liquid goes into an evaporator, which is typically located inside the home. Heat is extracted from the air to turn the refrigerant back into the gas. As this process takes place, the air around the evaporator is naturally cooled. That cooled air is blown back into the home to complete the circuit. The refrigerant goes back to the compressor to begin the entire process over. Some of units are more efficient than others at this process (see Resources below).
Ventilation System
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The blower forces the cool air back into the home, but in order for an air conditioning unit to effectively and efficiently cool the room, an outflow vent and intake are both needed. The outflow distributes cool air while warmer air is taken out of the room. Though is it possible to cool the room just by blowing air into a room without an intake, it will not cool as well as other rooms in the home and will become uncomfortable quicker than those other rooms.
eHow Article: How Central Air Works