What Is the Fundamental Concept Behind Federalism

What is the fundamental concept behind federalism?

A) Some powers belong to state governments; others belong to the national government.
B) States retain their sovereignty and use the national government only as an arbiter.
C) The federal government is sovereign and the states have no power except what the federal government grants them.
D) There is one single system of national law, drafted by the federal government and administered by the states.
E) Although the national government may make law, the state governments decide whether or not to follow it.