What is That's Okay?
1.
No
A polite negative reponse to an offer. Sounds like you're agreeing but actually means the opposite. This phrase is very hard to argue with without being rude. Commonly used when a salesperson tries to get you to buy something extra, or when someone who likes you but you don't want to involved with offers to do you a favor.
Poindexter: Hi Suzie! Would you like me to carry your books for you? They look heavy!
Suzie: That's okay
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