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The process of creating a block-style letter in Google Docs is very similar to the process in Word. This video demonstrates how to create a block-style letter using Google Docs. Note that it does not go into adjusting the line and paragraph spacing, so be sure to check that in Google Docs as well.
Source: Washington State Board for Community and Technical Colleges, https://www.youtube.com/watch?v=XhLJB5LIQiI This work is licensed under a Creative Commons Attribution 3.0 License.