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The console will log undefined. To understand this, we need to explain a few things about Javascript. Function-level scope. Functions create new scopes in Javascript:

  function setVar(){
    // inside this function we have a new scope
    // so this variable, declared in this function's scope, won't be available outside the function
    var varInFunction = 'inside a function';
console.log(varInFunction);  // throws 'ReferenceError: varInFunction is not defined'

Blocks like if statements and for loops do not create a new scope (this is also true of Python and recent versions of Ruby, but untrue of Java and C):

  if (true) {
    // this if statement doesn't create a new scope
    // so varInIf is available in the global scope
    var varInIf = 'inside an if statement';
console.log(varInIf);  // logs 'inside an if statement'

Declaration vs. assignment. A variable declaration simply tells the interpreter that a variable exists. By default it initializes the variable to undefined:

  var unicorn;
console.log(unicorn);  // logs undefined (NOT a ReferenceError)

A variable assignment assigns a value to the variable:

  unicorn = 'Sparkles McGiggleton';

We can both declare and assign in the same line:

var centaur = 'Horsey McPersonhead';

Hoisting. In Javascript, variable declarations are "hoisted" to the top of the current scope. Variable assignments, however, are not.

So returning to the original problem:

  var text = 'outside';
function logIt(){
    var text = 'inside';

The declaration (but not the assignment) of text gets hoisted to the top of logIt(). So our code gets interpreted as though it were:

  var text = 'outside';
function logIt(){
    var text;
    text = 'inside';

So we have a new variable text inside of logIt() that is initialized to undefined, which is what it holds when we hit our log statement.