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Atomic frequency standards using trapped ions or cold atoms work intrinsically in a pulsed mode. Theoretically and experimentally, this mode of operation has been shown to lead to a degradation of the frequency stability due to the frequency noise of the interrogation oscillator. In this paper a physical analysis of this effect has been made by evaluating the response of a two-level atom to the interrogation oscillator phase noise in Ramsey and multi-Rabi interrogation schemes using a standard quantum mechanical approach. This response is then used to calculate the degradation of the frequency stability of a pulsed atomic frequency standard such as an atomic fountain or an ion trap standard. Comparison is made to an experimental evaluation of this effect in the LPTF Cs fountain frequency standard, showing excellent agreement.