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In video 2, the tutorial focuses on adjusting paragraph formatting, specifically changing indentation. There are different methods to change the indentation, including using the paragraph settings or the layout settings. The instructor prefers to use the paragraph settings. To change the indentation to one inch or one centimeter, simply enter the desired measurement on the left and right sides. The computer will automatically convert the measurement if necessary. It is a simple process to adjust the paragraph indentation as needed.