@puja khetan , Welcome to Apigee Community.
Basically, Response cache policy caches entire response payload & it is attached twice in API Proxy flow in request & response. First time in response it gets executed & caches the data. Once it's cached, Further requests will be handled in request flow where it returns the response data directly from Apigee instead of hitting the target server.
Populate cache policy is used to selectively populate part of response or certain information into Apigee Cache. You will retrieve the cached data using Lookup cache policy.
Hope it helps.
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