A vector image is an image made up of lines and curves that are stored as mathematical formulas, and can be moved freely or modified without losing detail or clarity. Whereas a bitmapped image will lose clarity when rescaled, the vector graphic can be scaled indefinitely without losing clarity.
The example below shows the effect of a bitmap graphic versus the vector graphic. When zoomed in, the bitmapped image appears jagged, whereas the vector graphic appears clear and crisp.

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