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Acronyms are words which were created by taking the first letter (or several letters) of each word of a phrase.

Sometimes acronym is reserved for only those words which can be pronounced phonetically (such as scuba, radar, laser), in which case they are contrasted with initialisms (such as FBI, NAACP, BBC), which must be pronounced one letter at a time.

See Wikipedia’s page on acronyms and initialisms for more information.

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