When someone says, "Happy New Year," how should we answer?
"Happy new year to you, too."
Or just: "Happy new year!"
Or in some other way?
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The most common response is to echo back the same thing: "Happy New Year!"
This also applies to any "common" holiday, meaning one that is not personally related to you. So it's the same for "Merry/Happy Christmas", "Happy Easter", and various country-specific holidays: "Happy Thanksgiving", "Happy Fourth of July", and so on.