Discussion
Which resource does FM spend to obtain its noise advantage?
Answer: C
FM spends channel bandwidth, roughly twice the deviation plus twice the highest message frequency, and receives an output ratio improvement growing with the cube of the index. Transmitter power is held constant in the comparison, which is what makes the trade worth having. Dynamic range is relaxed rather than spent, since a limiter tolerates amplitude variation. And FM does not need a linear modulator, another of its practical advantages. Naming the resource spent and the benefit obtained in the same sentence is the compact way to hold any scheme comparison in mind.
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