Question about SQL Backups through Management Studio

This is mainly a word issue.  when I look at the right click a database and select properties....
what does the recovery model drop down list signify?  I am confused as to why it is there.

Shouldn't this be defined by the backup jobs I have in place
ie... simple backups that get the mdf file for state in time.
or full backup that gets the log file.

im confused... when I choose one of the 3 options.... what does this have to do with the database itself.
is it just for documenting purposes or does it change behavior in some way?

thanks
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