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When would a normally open and normally closed relay be used?
It really depends on what you're trying to control. A normally closed relay is simply going to connect the circuit when the relay isn't energised. This would allow the crcuit to normally be connected until you energise the relay at which point the circuit woudl become open.
I can't actually think of a time where I've used a NC relay. I typically want the relay to switch a circuit (fuel pump, engine fan etc) on and hence a NO relay is preferred. You can also buy changeover relays which switch between two contacts depending if the relay is energised or not.