A closed PV graph illustrates the relationship between pressure and volume in a thermodynamic system. Work done on the system increases its energy, while work done by the system on its surroundings decreases energy. Positive work is associated with system expansion, represented by a transition from smaller to larger volume, while negative work occurs during contraction. The work done is quantified as the area under the curve in the graph, with the sign determined by the direction of the loop; clockwise indicates positive work and counterclockwise indicates negative work. Understanding these principles is essential for analyzing energy changes in closed systems.