CareerCup

First of all CSR asks always stupid questions and this question is not any different.I hope they stop asking stupid questions which they themselves are not clear about.

volatile means the value of that variable is always read from its memory location on access and written to its memory location on mutation.So any optimization(by the compiler) that doesn't affect this can still be used.
Compiler uses all the tricks to make your code faster such as 'tail call'.
Most of the time the compiler would read the memory to get the value but in below code it may not do that as it can find out(probably by static analysis) that this value is not going to change so it will optimize it.

foo()
{      
      cpsr_reg = 30; /* this is cpu register */
      printf("%d\n", cpsr_reg);
}

Compiler will optimise it as below:

foo()
{      
      cpsr_reg = 30; /* this is cpu register */
      /* but cpsr_reg can change between the above and below instruction */
      printf("%d\n", 30);
}

So by adding volatile you are just instructing the compiler to not do this and compiler.
How does it do that would be specific to compiler.

I guess the volatile is being implemented by reserving a pool of certain memory for the usage even if the memory goes over the system capacity so that it can be reused.

By declaring a variable as volatile, the O.S forces the process to read the value from Main M/Y, not from the cache. So, the variable declared as volatile, will have the latest value.