Explanation: The fundamental difference lies in how they process the received signal. An analog receiver directly processes the continuous, varying waveform of the radio signal. In contrast, a digital receiver converts this continuous analog signal into discrete binary values (0s and 1s). This conversion requires **decision circuitry** (typically an Analog-to-Digital Converter, or ADC) to sample the analog signal and assign it a "1" or "0" based on whether its amplitude crosses a predefined threshold. It's making a "decision" about the signal's state at any given moment. A) Both types of receivers require amplification; this is not a distinguishing feature. C) AGC (Automatic Gain Control) is essential for digital receivers, often preceding the ADC, to maintain a consistent signal level and prevent overloading or underdriving the converter, ensuring accurate digital representation. D) Digital receivers, like all electronic systems, are subject to various forms of distortion (e.g., quantization noise, aliasing) and are not distortion-free.