a type 2 hypervisor
A type 2 hypervisor runs as an ordinary application on top of a normal operating system, the same way a word processor does. Picture a house that someone already lives in, and inside one of the rooms they set up a guest suite for a visitor: the house (the host OS) was there first, and the guest accommodation is something added on inside it. That is a type 2 (hosted) hypervisor — you keep using your usual Windows or macOS, and the hypervisor is just one more program you launch when you want to run another OS in a window.
Because it lives on top of a host OS, a type 2 hypervisor asks the host for resources rather than owning the hardware directly: when the guest wants to read a virtual disk, the request ultimately flows through the host's own file system and drivers. Modern type 2 hypervisors still use the CPU's hardware virtualization features for the heavy lifting, so guest instructions can run fast, but anything touching real devices goes the long way through the host. Familiar examples are Oracle VirtualBox and VMware Workstation, the tools people use to try Linux on a Windows laptop or run a Windows app on a Mac.
The appeal is convenience: you install it like any app, you do not have to dedicate the whole machine to virtualization, and you keep using your normal desktop alongside the guests. The cost is overhead and weaker performance and isolation than a type 1 hypervisor, because there is a full host operating system in the path and the hypervisor is just one of its many programs. For a quick test VM on a personal computer this is ideal; for running a data centre it is not.
A student installs VirtualBox on their Windows laptop, downloads an Ubuntu image, and clicks Start. Ubuntu boots inside a window while Windows keeps running normally underneath — they can drag the window around, close it, and Windows never skips a beat.
A hosted hypervisor runs a guest OS as just another app on your everyday desktop.
The type 1 / type 2 split is about where the hypervisor sits, not how fast it can be: a type 2 hypervisor using hardware virtualization runs CPU-bound guest code at near-native speed too. The real difference shows up in device I/O and isolation, where the extra host OS layer costs you.