The addresses bus carrier the address of memory location that the CPU has to access for getting data/opcode or storing the data in it. The same address bus carries the address of the I/O device. When the address to sent by the microprocessor, all the devices connected to it receive this address but only that device will respond which has got the required chip enable signal from the CPU.
The address bus is unidirectional and carries the address from the Microprocessors to the peripheral devices.
The width of address bus decides the memory capacity of the microcomputer system. If a microprocessor has n bit wide address bus, 2n = N memory locations can be addressed by it. Most of 8 bit microprocessor have 16 bit (2 byte) address bus and thus able to access 216 = 65536 i.e 64 K [1K = 1024 = 210] locations. It must be noted that it is not necessary to connect all 65536 memory units in a microcomputer system.