In a broader context, this expression is part of everyday conversation, showing agreement or affirmation. It's casual and commonly used among friends or in informal settings. The simplicity of the phrase makes it versatile, fitting various situations where a quick nod to agreement is needed.
Understanding such phrases helps in grasping the nuances of conversational English, allowing for more natural interactions. Practice using "That's right" or "Exactly" in different scenarios to enhance your communication skills.