hi,
to better understand this, we need to understand how modern Windows systems manage memory.
there are three (broad) ways to divide memory,
1>In-use
2>Standby
3>Free
Now, let's discuss them each a bit.
1>In-use: This is the RAM that Windows is actively using. It contains (most of the) critical operating system files, drivers, running services, and running applications.
2>Standby: This is a cache. In the memory hierarchy, the hard disk drive is the slowest, hence the computer will slow down the most when it needs to access data from the hard disk drive. Standby memory is a temporary cache for frequently accessed hard disk data. What's present in the cache depends on your general usage pattern and what you've done with the computer in the last few minutes.
We need to understand that the contents of this part of the memory is not essential for the computer to work, it's there purely to improve performance, and if a time comes when more memory is required for the "In-use" part, contents of the "standby" part will be automatically and instantly cleared by Windows to make room.
3>Free: Just as the name says, this is the memory that isn't being used for anything. If a process requests more memory, memory will be allocated from this section. If this section is 0, then parts of the "Standby" memory will be deleted to satisfy the new memory request.
Now, we need to understand "Commit".
When a program runs, it informs Windows about how much memory it might need. Windows satisfies this request by "committing" the memory, it's like Windows "Promises" the software that it will guarantee that much amount of memory to it.
Now, to answer your question,
Not all applications or processes loaded, are actually active all the time. Windows runs loads of memory-resident stuff, but a lot of them are "sleeping" most of the time. An example could be "Background intelligent transfer service". It's a service that's used for Windows updates. It loads every time when Windows starts, but of course, Windows does not check for updates or install updates all the time.
But since the service is running, it needs memory.
This memory should be allocated to the "in-use" section, which will in-turn reduce the amount of memory available for "Standby" and "free" (because total RAM is finite). Reducing the amount of memory available for "Standby", will mean it will result in a smaller cache, meaning Windows will be forced to use the hard disk more, meaning the computer will slow down.
Reducing "Free" will mean that if an application asks for new memory, and there isn't enough free available, the "Standby" will be used to make room for the request, which will again reduce the cache size, increase HDD access, and reduce speed.
Hence, it's advantageous to page out this process, making more RAM available for "Standby" and "Free".
Finally, not all the memory requested by an application is being used all the time the application is running. If an application requests for 500MB, Windows "Commits" 500MB". It's committed so Windows MUST make at least 500MB available for the application for as long as it's running. If the application is actually using 200MB at the time, the remaining 300MB can be paged out. The application will think it has 500MB available, while "In-use" section of the RAM will be reduced by 200MB only, this will let the application run happily, and yet let windows make more room for "Standby", thereby facilitating a bigger cache. When the application wants to use another 100MB, Windows won't actually use the page file, it will use RAM and reduce page file usage by 100MB. Using the page file this way is a clever trick to make room for things that can actually impact performance.
As you can see, modern versions of Windows are excellent at memory management, and everything it does, although apparently is counter-productive, but in real life, improves performance.
As a final note, if your Windows 8.1 computer is slower than it should be, it probably means something else is hampering performance, not memory management. It could be a rouge application, an out of date BIOS, outdated drivers, heavy anti-virus applications, malware infection, bad sectors in hard disk, or it could just mean that you need to add some more RAM. You mentioned you have got 4GB. The computer I'm using to type this is 8GB, but I've got another and that's a 4GB running 8.1 Pro, and that's plenty fast.
It typically depends on usage pattern and expectations.
I could be using software which require less memory and not multitasking much , or you could be expecting more speed out of your computer than i do from mine.
In general, 4GB should be enough for most of us!