One common computer language strategy is based on a "compiler". The computer languages C and its derivative C++ are old and popular computer languages that use this strategy, although they tend to have fewer features than dynamic languages (below).
// C++ code a = "hi"; b = a + "!";
This code appends the string "!" on to the end of "hi", resulting in the string "hi!" stored into the variable b. The machine code instructions in the CPU are too primitive to implement this append operation as one or two instructions. However, the operation can be accomplished by a longer sequence of machine code instructions strung together.
The Compiler for the C++ language, reads that C++ code and translates and expands it to a larger sequence of the machine code instructions to implement the sequence of actions specified by the C++ code. The output of the compiler is, essentially, a program file (.exe or whatever) made of many machine code instructions that implements the actions specified in the C++ code. The compiler produces the .exe file from the C++ code, and it is finished. Running the .exe can happen later, and is a separate step.
The "source code" is the high level code authored by the programmer and fed into the compiler. Generally just the program.exe file is distributed to users. The programmer retains the source code. Changing the program in the future generally requires access to the source code. For example to add a feature, the programmer would make changes in the source code, and then run the compiler to produce a new version of the program.
"Open Source" refers to software where the program includes access to its source code, and a license where the user can make their own modifications. Typically open source software is distributed for free. Critically, beyond the free price, open source software also includes freedom/independence since the user is not dependent on the original vendor to make changes or fixes or whatever to the source code. Since the source code is available, if a user feels strongly enough about some feature, they can add the feature themselves, or pay someone to add the feature. Open source means you are not dependent on some other part .. attractive as software is such a critical part of many organizations. Typically open source licenses include a requirement that such improvements to the source code be made available back to the community at large. We'll talk about open source more later on, but I wanted to touch on it here since it is a good example of the difference between a program and its source code.
a = 1;, does it
b = a + 2;, does it
The interpreter runs this code, by taking the lines one at a time, and for each, interpreting its actions. For "a = 1;" the interpreter reserves a few bytes to store the value of a, then stores the value 1 into those bytes. Then for "b = a + 2;" the interpreter evaluates (a + 2) getting the value 3, reserves some bytes for the b variable, then stores the 3 into the b bytes.
A compiler translates all the source code into equivalent machine code program.exe to be run later -- it is a bulk translation. An interpreter looks at each line of code, and translates and runs it in the moment, and then proceeds to the next line of source code. The interpreter does not produce a program.exe, instead it performs the actions specified in the source code directly.