Documents don't contain just words. In fact, there is an old adage that says "a picture is worth a thousand words." Therefore, one of the most common things to add to a document is a graphic or two in order to augment or illustrate your prose.
The quickest way to add a graphic to a document is to just drag and drop. Click once on a graphic file, drag it over the document (you should see a plus sign appear near the bottom of the graphic), and drop it where you want it. Docs uploads the image and it appears in the document. From there you can move the graphic around and resize it to get the desired look.
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