Engine displacement is the volume of an engine’s cylinders, a general indicator of its size and power. The displacement figure represents the total air displaced by the pistons in all of an engine’s cylinders and is expressed in liters, cubic centimeters or cubic inches. The size of these cylinders loosely defines the size of the explosion within, which is why displacement suggests an engine’s power. That said, many other factors affect an engine’s output, including the number of cylinders, the compression ratio within the cylinders and the induction system. Turbochargers and superchargers net higher engine output by forcing more air — and thus more fuel — into the cylinders, which results in a more powerful explosion than would occur in a normally aspirated engine, all other aspects being equal.
If you want to compare one engine to another, you’d best look at the bottom line, the power ratings. Engines from different manufacturers or of different designs having the same displacement may vary considerably in output power. But when comparing two engines available for the same vehicle — say, a 2.3-liter and a 3.2-liter, both normally aspirated — the one of larger displacement will almost certainly be more powerful.
Information for this was taken from Cars.com’s glossary, written by Joe Wiesenfelder.
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