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The thermostat closes (preventing the circulation of cooling fluid through the radiator) while the coolant is below the setpoint. Once the fluid rises to the setpoint, the thermostat opens. This assures that the engine is operating at a specific temperature. Engines are far more efficient when operating at a higher temperature... so long as it isn't TOO high. Without a thermostat, the coolant constantly circulates through the radiator and cools as much as the radiator will allow.

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