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Although both systems' matter do not have contact with the environment an thus cannot exchange matter, a closed system is one in which the matter can exchange energy with the environment, whereas an isolated system is one in which the matter cannot exchange energy with the environment.
Closed systems usually are more applicable to real life situations, because energy is constantly being transferred between the system and the surroundings without the transfer of matter. The textbook gave the example of using an ice pack for treating athletic injuries. The only time isolated systems are relevant is when a system has no contact with its surroundings and thus cannot transfer energy to them. An example would be a thermos with hot liquid in it because it has insulating walls, but even then the liquid would eventually cool down which means the system was not completely isolated.
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