General question about folder level permissions

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http://www.unix.com – How is the level of access on a particular folder determined? I have heard (its just hearsay so am not particularly sure of it) that the access a particular user/group has to a low level directory is also affected by the level of access granted to the user/group on its parent directories. e.g. If user has read and write access on Code: /usr/local/temp/a but no access on Code: /usr/local/temp will he/she/it still be able to read and write files on /usr/local/temp/a? What logic (if any) is used here to determine the level of access? And is it different for individual users and app (HowTos)