Final answer:
The number of states needed by the Viterbi algorithm per symbol time for M-QAM modulation is 256.
Step-by-step explanation:
The number of states needed by the Viterbi algorithm per symbol time can be determined by considering the modulation order M and the channel order N. In this case, the channel is FIR order 1 and M-QAM modulation is used instead of BPSK. For M-QAM modulation, the number of states needed by the Viterbi algorithm per symbol time is given by 2^((M^2)*(N+1)).
Substituting M=2 and N=1 into the formula, we get 2^((2^2)*(1+1)) = 2^8 = 256. Therefore, the number of states needed by the Viterbi algorithm per symbol time for M-QAM modulation is 256.