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Its converts Analog signal into Digital signal and Vice Versa.
MOD stand for Modulation
Dem stand for Demodulation
MODEM (Its a Media MOD for Modulation and DEM for DEModulation it' s Converts the Analog signals into Digital signal.
modulator to convert the signal from digital to analog and demodulator to convert the signal from analog to digital , they took the first three letters from each word and the D is common so the result is MODEM:)