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In typesetting, paragraphs are usually referred to as body text.
There are different recommendations for the line length of paragraphs. Anywhere between 40 to 80 characters is fine. 66 characters are widely regarded as ideal. Since digits are usually slightly wider than the average character width, a quick rule of thumb is that a line should fit about 60 digits.
Three paragraph styles are commonly used in documents:
Indented paragraphs have the first line indented. This style is common in books.
It is usually recommended that the indent is one em, i.e., the same as the type size. So if the body text is set in 10 points, then the indent is also 10 points. Sometimes indents are one and a half or even two ems. Paragraph indents should not be less than half an em (also called an en) and not more than three ems.
Figure 1: Indented paragraph with 1 em indent
Figure 2: Indented paragraph with 2 em indent
Commonly only paragraphs that follow other paragraphs are indented. Paragraphs the follow other page elements, such as headings or lists, are not indented, but are set left-flush.
Figure 3: Left-flush and indented paragraphs
Block paragraphs are separated by white space. Block paragraphs are commonly found in technical documents.
A space consisting of a full line break is considered too much. Usually a space of 60 to 80% of the line height (= type size + leading) is recommended. The space should be at least 50% of the line height.
Figure 4: Block paragraphs with 65% spacing
Hanging paragraphs have the first line at full line length whereas subsequent lines are indented. Hanging paragraphs are mainly used for bibliographic information. It makes the most important part of a reference, the name of the author, stand out. We are not aware of any recommendations about the amount of indentation. We usually use an indentation of 0.25 in. (~6.5 mm).
Figure 5: Hanging paragraphs with 0.25 in. indentation