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To answer your two-part question: Not always and no.

A 3-liter engine is a larger engine than a 2 liter. The size is determined by calculating the volume of each cylinder and multiplying that value by the number of cylinders the engine has.

An engine is essentially a pump. Since a larger engine can pump more air/fuel mixture, than it can make more power which will provide a higher top speed, unless other factors interfere (speed limiter, etc)

A car with a larger engine cannot 'hold' more fuel. fuel is 'held' in the gas tank.

back in the '50s & '60s it was pretty easy to figure out that cars that had more displacement (cubic inches) had more power. Because of advances in engine design, this is no longer the case. Variations in compression ratio, force induction (supercharger & turbochargers) can make a small displacement engine put out more power than a large displacement engine. These days it's entirely possible for a small hatchback with a 4 cylinder engine with less than 1.6 liters to put out more power than a V8 with over 5 liters.

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Q: If a car has a 3 liter engine does this mean that it has a higher top speed of a 2 liter engine or does is just mean that it can hold more fuel?
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