  We consider a degenerate parametric oscillator whose cavity contains a
two-level atom. Applying the Heisenberg and quantum Langevin equations, we
calculate in the bad-cavity limit the mean photon number, the quadrature
variance, and the power spectrum for the cavity mode in general and for the
signal light and fluorescent light in particular. We also obtain the normalized
second-order correlation function for the fluorescent light. We find that the
presence of the two-level atom leads to a decrease in the degree of squeezing
of the signal light. It so turns out that the fluorescent light is in a
squeezed state and the power spectrum consists of a single peak only.
