Final answer:
The IAM policy allows the launching of EC2 instances exclusively in the AWS eu-west-1 region, indicated by the condition that requires the aws:RequestedRegion to match eu-west-1.
Step-by-step explanation:
This IAM policy specifies that the action ec2:RunInstances is allowed, but only under a certain condition. The effect "Allow" indicates that it is granting permission for the action mentioned. The action is restricted by a condition that requires that the aws:RequestedRegion must equal "eu-west-1". This means that the policy allows the launching of EC2 instances, but it is geographically limited to the eu-west-1 region. Therefore, this policy does not grant permission to run instances in any other AWS region.