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Sometimes you want to replace one thing, and you would use Replace for that. There are other times when you want to replace the same thing over and over again through a document. So for example you might have been using the wrong spelling for a word and want to replace all occurrences of that error in one go, rather than doing it one at a time. In that situation you would use the Replace All option.

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Q: What is difference between Replace and Replace All in Microsoft Word?
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