Nested classes are divided into two categories: static and non-static. Nested classes that are declared static are simply called static nested classes. Non-static nested classes are called inner classes.

Static nested classes are accessed using the enclosing class name:
OuterClass.StaticNestedClass
For example, to create an object for the static nested class, use this syntax:
OuterClass.StaticNestedClass nestedObject = new OuterClass.StaticNestedClass();
Objects that are instances of an inner class exist within an instance of the outer class. Consider the following classes:

class OuterClass {
    ...
    class InnerClass {
        ...
    }
}
An instance of InnerClass can exist only within an instance of OuterClass and has direct access to the methods and fields of its enclosing instance.

To instantiate an inner class, you must first instantiate the outer class. Then, create the inner object within the outer object with this syntax:

OuterClass.InnerClass innerObject = outerObject.new InnerClass();

8) Is an inner class able to access only Final Outer variables ?
Yes, Inner class could access only the “final” outer instance variables.

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