text: AM is Amplitude Modulation whereby the signal is encoded by changes in signal strength.  It is very easy to do that so it was the first method in use.\n\nAM radio is usually transmitted at MF (Medium Frequency) which gives enough bandwidth for voice and low quality music and in the day time doesn't propagate very far since the D-region of the ionosphere absorbs the signal.\n\nBut at night the D-region doesn't exist and so the signal can travel all the way up to the F-region where it is reflected back down to Earth which allows MF signals to propagate very long distances at night and is why you can often hear AM stations from the other side of a continent at night.\n\nFM is Frequency Modulation in which the signal is encoded as changes in Frequency.  It is harder to do but the result is more resistant to interference and gives better quality.  FM is also transmitted at VHF (Very High Frequency) which gives higher bandwidth so more signal can be sent (thereby allowing increased quality).  VHF goes pretty much straight through the ionosphere so unless there is Sporadic E (massive increases in ionospheric electron density where the E-region is) VHF isn't going to be reflected anywhere and so it'll only be rather local (the wave will follow the ground to some extent).\n\nThe lower frequency MF waves will go through materials better than VHF so AM tends to work better in tunnels.\n\nAM and FM were both launched as mono systems with stereo being retrofitted onto FM by the use of a difference channel so as to allow old mono FM receivers to continue to work (basically the original mono FM signal is sent but superimposed onto that is the difference between the left and right channels).