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In this video tutorial, the presenter demonstrates how to reduce the file size of a Microsoft Word document containing images. By adjusting the image size and quality settings in the advanced options menu, it is possible to decrease the file size without compromising on image quality. This is especially useful when the file is too large to email or use for other purposes. The default setting is 220 ppi, but this can be altered based on individual needs. By following this process, users can effectively reduce the file size of their Word documents.