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In this video tutorial, the presenter demonstrates how to reduce the file size of a Microsoft Word document, particularly when it contains numerous pictures. By adjusting the image size and quality settings in the advanced options menu, users can effectively decrease the file size without compromising image quality. The default setting is 220 ppi but can be adjusted based on personal preference. This process is useful for situations where high image quality is not necessary, such as emailing or sharing the document digitally.