Instruction: Provide a detailed explanation of how the 'IF' function works in Excel and give a simple example of how it can be used to make conditional decisions in data analysis.
Context: This question aims to assess the candidate's understanding of one of the fundamental functions in Excel, the 'IF' function, which is crucial for making decisions within spreadsheets based on logical conditions. The response should illustrate the candidate's ability to apply this function to solve common data-related problems.