This next step in the Applied RF Engineering series looks at design parameters at the system-block level. We introduce the key system design parameters and show how individual component parameters affect those top-level specifications. Physical limitations and performance tradeoffs are defined and examined. Once these limitations are understood, the common receiver and transmitter architectures can be described intuitively as solutions to achieve the best performance under different scenarios. We will also introduce the fundamental digital modulation formats and show their impact on system requirements.