  We analyze how light-induced coherent population oscillations and
ground-state Zeeman coherence in an atomic medium with degenerate two-level
transitions can modify spectra of applied cw resonant radiation at the sub-mW
power level. The use of mutually coherent optical fields and heterodyne
detection schemes allows spectral resolution at kHz level, well below the laser
linewidth. We find that ground-state Zeeman coherence may facilitate nonlinear
wave mixing while coherent population oscillations are responsible for phase
and amplitude modulation of the applied fields. Conditions for the generation
of new optical fields by nonlinear wave mixing in degenerate two-level atomic
media are formulated.
