Java: What is the difference between checked and unchecked exceptions?

1// Checked — must catch or declare
2public void readFile() throws IOException {
3    throw new IOException();
4}
5
6// Unchecked — no need to catch
7public void divide(int a, int b) {
8    if (b == 0) {
9        throw new ArithmeticException();
10    }
11}