Final answer:
In business letter formatting, paragraphs are typically separated by two spaces for clear readability.
Step-by-step explanation:
The vertical spacing between paragraphs in a business letter is typically two spaces. This is often referred to as double spacing and is part of a format known as block formatting. When using block formatting, all text should be left-justified, and paragraphs should be separated by two spaces, with no indentation at the start of each paragraph. A common choice for font would be size 12 Times New Roman or Arial for good readability.