<p>In <strong>Vue 3</strong>, the <strong>Composition API</strong> provides a new way to write Vue components that is more flexible and modular than the Options API. It allows developers to group related logic together inside <code>setup()</code> rather than relying on component options like <code>data</code>, <code>methods</code>, and <code>computed</code>.</p><p><strong>Reactive Data</strong> in Vue 3 is made possible by <code>reactive()</code> and <code>ref()</code>, which create reactive data objects. <code>reactive()</code> works with complex objects, while <code>ref()</code> is used for primitive values like numbers or strings. The Composition API makes it easier to manage state and logic across components.</p>