We use multiwavelength spectra of core-dominated flat spectrum radio-loud quasars (FSRQs) to study properties of jets in active galactic nuclei. From a comparison of the predicted bulk Compton radiation with the observed soft X-ray fluxes, we find that these jets must be optically very thin. This eliminates the importance of such processes as Coulomb interactions, pair annihilation, and bremsstrahlung and determines the minimum distance from the black hole where a powerful jet can be fully developed (accelerated, collimated, and mass loaded). In the case of pair dominated jets, this distance is 100GMBH/c2. Further constraints on the parameters of a jet can be derived from luminosities and positions of spectral peaks of low-energy (IR/optical) and high-energy (γ-ray) radiation components, provided that both are produced by the same population of electrons. Whereas there appears to be a consensus about the synchrotron origin of the low-energy component, there is still debate about the mechanism of production of γ-rays. Most likely, they result from Comptonization of a soft radiation field by the same electrons that produce synchrotron radiation. Such a soft radiation field can be provided by the synchrotron process in a jet, by the accretion disk, and by a fraction of the disk radiation that is reprocessed/rescattered by emission line clouds, dust, and intercloud medium. We show that for FSRQs, the production of the high-energy radiation can be dominated by Comptonization of synchrotron radiation only for jets with moderate bulk Lorentz factors Γj (3) or if external radiation fields are much weaker than those observed in typical quasars. Furthermore, in synchrotron self-Compton (SSC) models, the relativistic plasma producing nonthermal radiation is constrained to be very weakly magnetized (B' < 0.01 gauss) and located at very large distances (r ~ 1019 cm). These can impose problems with jet confinement and with short observed timescale of variability. In the external radiation Compton (ERC) models, the magnetic fields are predicted to be much stronger (B' ~ 100 gauss), and nonthermal radiation can be produced very closely to the black hole (r ~ 1016 cm), which alleviates the problems with plasma confinement and short timescale variability. However, because of the close proximity to the black hole, the constraints imposed by the bulk Compton radiation imply that the plasma must be free of e+e- pairs. Finally, we discuss the difficulties that existing models have in explaining the sharp spectral breaks at MeV energies and postulate a hot version of the ERC scenario for the production of MeV peaks. We show that appropriate electron temperatures (kT ~ 100 MeV) to produce the luminosity peak at MeV energies by Comptonization of external UV radiation are achievable at subparsec distances only for proton-electron plasmas.
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