A relay is used to control a high-current circuit with a low-current signal, as in the starter solenoid of your motor. They are a simple electromechanical switch made up of an electromagnet and a set of contacts. They can be broken down into 2 circuits (A control circuit and a load circuit). The control circuit is the side with the coil and the load circuit is the side with the switch. When a current flows through the coil, the resulting magnetic field attracts an armature that is mechanically linked to a moving contact. The movement either makes or breaks a connection with a fixed contact.
http://www.autoshop101.com/forms/hweb2.pdf (More information on relays).
Article by Medicine_Man
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