Exactly as it describes it will change the amplitude of the generated sine wave, which will change the max and min of the signal. The bias will change the average value of the signal. Both will play an important role in many components. For example a laser needs to have an input signal above the threshold current before it acts as a laser. If the bias is not large enough and also the amplitude is too large, the signal will dip below the threshold current and your output signal will be distorted.
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