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Unlike an inline (or in-text) quotation, which is integrated into the text, a block quotation is a longer quotation set off from surrounding text by paragraph breaks. These need to be marked up as "block quotations".
Use the Quote style to style blockquotes: Setting up Microsoft Word for Editing E-Text
Here's a quick video on how to set up the Quote style in Word:
Insert a blockquote in Word using the Quote style
Example of text that uses the Quote style: