it varies. AM is Amplitude Modulation (variation in the signal amplitude) FM is Frequency Modulation (variation in the frequency). These are both analog signals, and you just have to have some simple components to filter for a specific channel and then send the wave to the speaker, and the inverse for broadcasting.
There is also DAB+, which is the newer digital radio. Im not exactly sure how it works, but it requires a smarter radio to read the signal, and then turn it into sound. It probably uses both FM and AM in its inner working to send a digital sound file, but I couldnt find a good source on exactly how it works.
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