Which to use "it" or "that"?

Question

I am often confused about the usage of "it" and "that".

"Hey, why don't we go to the movies on Sunday?"

"It's a good idea." / "That's a good idea."

"Did you know John had a car accident yesterday?"

"I didn't know it." / "I didn't know that."

"You said you didn't like pizza."

"No, I didn't say it." / "No, I didn't say that."

In the cases above, which one should I use, it or that?

I heard that "it" generally refers to one word while "that" can refer to more than two words or a whole phrase, so I guess I should use "that" in all the three cases above. Am I correct? Isn't it possible to use "it" to refer to a phrase?

Answer 1

"That", as well as other words like "this", are demonstratives. While the pronoun "it" of course can refer to something that has been already mentioned, a demonstrative is "pointing stronger" at what's being referenced, so to speak. So you could use "that" if you want to express that demonstrative meaning, and you could use "it" if you don't want to (or you don't want to the demonstrative quality to be as strong).

In all three examples you mentioned, "that" feels more natural to me, because each time the second phrase directly answers to and refers to the first one.

Answer 2

Your word/phrase distinction wouldn't have occurred to me, but I think it's a decent rule of thumb. You could think of it this way: You can use "it," after you've linked the phrase to the single-word antecedent "that".

"You said you didn't like pizza."

"No, I didn't say that."

"Yes you did, you said it yesterday!"

As written, all your examples need "that".