You CAN definitely boot an iMac from an external drive BUT it will almost definitely be slower than using the internal drive.
If, however, you want to try it all you need to do is use a program like SuperDuper or Carbon Copy Cloner and clone your iMac to an external drive then boot from that drive. I think you will be disappointed.
I actually use CCC as a back up facility to an external drive, in addition to Time Machine, as the back up you make with CCC is bootable whereas you cannot boot from Time Machine. CCC has a trial period of a month and is a far more straightforward way of putting your os onto an external drive IMHO.
I have been using an iMac for nearly a year now and learning all the time. I certainly have found Time Machine brilliant and light years ahead of Windows System Restore, which never worked when I really needed to do a restore! In fact it seemed that it's inability to work was directly related to the seriousness of the problem you needed to cure.
The ability of CCC to be bootable is a definite plus. I have used Time Machine since it was introduced to restore to a new drive on many occasions and always found it very simple but I will certainly have a look at CCC.
It still astonishes me that MS have never managed to produce a back and restore to compare with Time Machine.
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