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What does it mean to indent the first line of a paragraph by 5 spaces or 1 tabs in paper format?
It specifies how far text is indented or where a column of text begins.

Tabs position text at a specific horizontal position in a text box. The default tab setting depends on the horizontal ruler unit setting in the Units and Increments preferences dialog box. Tabs work on the whole paragraph. The first tab stop you set will delete all the default tab stops to its left. Subsequent tags will delete all default tags between setup tags. You can set tabs, such as left alignment, center alignment, right alignment, decimal point alignment or special character alignment.