It makes different frequency ranges louder or softer. For example, small speakers are often not very good at reproducing base ranges, so you might set the lower frequencies to be louder. Or some people have trouble hearing higher frequencies, so you might set them to be louder.
Essentially, there are electronics that can break the sound up in to different frequencies. Each range of frequencies is now it’s own signal which can be manipulated in any way. Equalizers mostly just change the amplitude (volume) of the signals, then combine them all back together into a single signal that is sent to the speaker.
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