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Analog signals represent values with a continuously variable level. The signal has an infinite number of possible levels. Because the signal is infinitely variable, it can be affected by outside interference as well as by the circuits that carry and process the signal. These are the sources of noise and distortion.

A system that handles analog information must be able to operate at the highest frequency that the signal will use. For audio, that is typically 20KHz and for video, in the region of 10MHz.

A digital signal represents values in discrete steps and is often shown as a numeric value. The signal has a limited number of steps and there is no way to represent any intermediate values. The limitation in the number of steps is in itself a source of distortion but the nature of digital signals is that they are resistant to distortion and noise so the signal will not be degraded further. As the number of possible values increases, so the distortion caused by digitizing the signal will reduce.

A digital system typically has to operate at far higher frequencies than its analog counterpart. Using audio signals as an example, a typical digital signal will capture a 16 bit value 44000 times each second. The frequency response of circuits handling the data will need to be in the region of 700KHz rather than the 20KHz for an analog signal.

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