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Caroline Patton demonstrates how to do peer editing and review in Microsoft Word to track changes as a proofreader or teacher. This method reduces printing costs by allowing papers to be emailed back and forth instead of being printed. This is a more efficient way for peer editing, as it eliminates the need to print multiple copies for each group member. Patton emphasizes the importance of minimizing paper waste and provides two ways to access the proofreading format in Word.