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I looked up the the word 'cool' in dictionary and discovered that it's a slang, meaning:

  1. Knowledgeable or aware of the latest trends or developments 'spent all his time trying to be cool'
  2. Excellent; first-rate: 'has a cool sports car; had a cool time at the party'
  3. Acceptable; satisfactory: 'It's cool if you don't want to talk about it.'

Well, I have seen people using this word all over the place but my question is, in what sense it is actually used?

It must be a mild slang that most people do not find wrong using. Besides I haven't seen any elderly people using it yet.

Does the use of this word vary with region?

Edit: It would like to know about its usage particularly in British English.

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SUPPLEMENTAL to Maciej Stachowski's ANSWER

Cool as Slang
This use of cool appears to have arisen among urban African-Americans in the 1930s. It was widely adopted among admirers of cutting-edge jazz (the 'beats') shortly after WWII, and spread in the 1950s into the speech by which young people (those in their teens and early twenties) distinguish themselves from their elders—which is what we usually mean by the term 'slang'.

Cool was virtually universal in my generation, the Boomer cohort. It has remained in use among us, and has been received into the speech of succeeding generations: I hear it a score of times a day in my shop and from my Millenial son and his friends.

If you come to the U.S. you will find many, many elderly people—me, for instance—employing cool as a universal approbative.

So I think cool in this sense has long since passed out of 'slang' and become an ordinary mainstream colloquial usage. Indeed, I think we can pin down just when this happened: in the mid-80s, when the surfer speech community started preposing their fresh slang intensive way. Clearly, cool was no longer sufficiently marked to represent the language of an in-group. By 1990 the chat-room l33t found it necessary to invent a new spelling, kewl, to indicate that their use of cool was ironic.

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It's a word with a very broad meaning - in general, it means "good", with connotations of "flashy" or "awe-inducing". If you say you have a "cool" car, it's probably a Ferrari or a Porsche and not a Toyota, even if the Toyota is more reliable.

With regard to people, "cool" usually means "easy-going", but can generally refer to any positive qualities. A "cool" boss will usually be the one you can hang out with after work, but it can also mean he's a very good and knowledgeable manager depending on the context.

This also explains the use of "to be cool" in the first example - a person who's trying to "be cool" is a person who's trying to be easy-going, to "blend into" the group by researching their interests.

Finally, "It's cool (if...)" is a somewhat idiomatic phrase meaning "it's fine". Similarly, "to be cool with (sth)" means "to accept something".

The slang meaning of the word is very popular, and in vernacular English has all but replaced the original meaning of "cold" or "chilly". A quick scour through COCA shows the original meaning of the word being limited to more scientific and formal texts, while the literature and newspapers have embraced the slang usage.

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