The primary purpose of any birth control pill is to prevent your body from ovulating, that is, releasing an egg as it normally does every month. They do this by containing horomones that makes the body think it is already pregnant. This will not affect pregnancy tests, since pregnancy tests check for hcg, which can only be released if the woman is truly pregnant.
The pills may also thicken the mucous at the cervix, and thin out the lining of the uterus that normally forms each month to support the potential embryo.
When you are on the placebo week, you have stopped the flow of horomones. Your body then goes through a false menstrual period, shedding what thin lining it has. You are still protected during this week.
so basically there is no chance of pregnancy when youre on the pill if you take it correctly?
Wrong. No method of birth control is 100% effective even if you take it exactly as intended. The pill is very effective, but pregnancy is by no means impossible. That is why many people choose to use more than one method of birth control.