Using "That" to talk about iedas

The demonstrative pronoun "that" is sometimes used to refer to concepts or ideas instead of real objects. Here, the word "that" refers back to the entire previous sentence. Note: the short form "that's"(rather than "that is") is generally used in spoken English.
指示代名詞 "that" 通常用來指一種概念或想法，而非實體。在此處，"that"是指先前的整個句子。請注意，在口語中通常會用縮寫形態 "that's"，而不用 "that is"。
Let's take the day off at Friday and go to the beach.
That's a reasonable suggestion.
That's a good ieda.

In the second sentence, the demonstrative pronoun "that" refers back to an entire idea. The reference is to the fact that the company needs to expand.
在第二句中，指示代名詞 "that" 是指整個想法，指公司需要擴張的事實。
Are you saying that company needs to expand. 
That's right. We're losing market share.

When referring to concepts or ideas, use the demonstrative pronoun"that" instead of "this" even if the reference is to a sentence spoken just shortly before.
在指某些概念或想法時，即使提及的對象是稍早曾說過的句子，仍要用指示代名詞 "that" ，不用 "this"。
What about expanding our product line?
That might work.

Grammar

USING THAT TO TALK ABOUT IDEAS

The pronoun that can refer to concepts or ideas instead of real objects.

Using That to Refer to the Entire Previous Sentence
Let's take the day off and go to the beach.
    That's a good idea.

Using That to Refer to an Entire Idea
Are you saying the company needs to expand?
    That's right.