In an online text assignment, you will require the student to enter text into an online text editor. This text editor is part of the assignment activity.
If students are more comfortable writing the text in a word processor, they can copy and paste it into the text editor.
You cannot paste graphics into Moodle's online text editor. Each graphic must be uploaded and placed into the document using the text editor's Insert Graphic icon. Alternatively, enable the option for adding text and file submissions so that the graphics can be uploaded as separate files.