An n-channel enhancement mode MOSFET is biased at VGS > VTH and VDS > (VGS - VTH), where VGS is the gate-to-source voltage, VDS is the drain-to-source voltage and VTH is the threshold voltage. Considering channel length modulation effect to be significant, the MOSFET behaves as a

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  1. voltage source with zero output impedance
  2. voltage source with non-zero output impedance
  3. current source with finite output impedance
  4. current source with infinite output impedance

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Option 3 : current source with finite output impedance
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Ideal enhancement MOSFET is a MOSFET which saturates when VDS ≥ VGS - VT and allows a constant current to flow across it even after a further increase in VDS.

But for a non-ideal MOSFET (i.e. MOSFET in which channel length modulation effect is significant), a change in VDS beyond VGS - VT, will result in a further increase in current beyond saturation. This effect is known as channel length modulation.

The output characteristics will now become:

now is no longer infinite.

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