I have observed that people from America, greet by asking, "Hi, how is it going?". I usually say, "It is going good" and return a smile. Sometimes, I have observed people saying "Thank you" and returning the question. What is the proper etiquette here?
From the sounds of it, you're doing fine. Typical responses would include:
The "Thank You" may be appended to your response; its use is intended to thank the person for asking the question (good manners, etc.).
In general, respond with the same, if there is time. Sometimes the question is simply a formality with little to no expectation of a response (as in passing another person on the street with whom you have no relationship), but otherwise the expectation is to return the question, even though there is a high probablity the response will be positive (e.g., Good, Fine, etc.).
Rarely does one respond or hear the response of "bad" because, unfortunately, the question being asked isn't really what the other person is interested in. It's a culturally accepted thing to do, but it really doesn't amount to much more than a "Hi" and "Bye".
Variations on the theme include:
- How are you?
- How are you doing?
with similar responses (though "well" will often replace "good").
You are right, that is very common here. The "proper" answer is
Just fine, thank you.
It is not meant literally, and the questioner usually does not want to hear about whatever may be actually troubling you if you are not feeling "fine".
Even knowing this, greetings like this rather annoy me. I don't like lying if I'm not fine (even though you are supposed to) and answering them honestly requires more self-reflection than I should really have to go through on the spur of the moment just because I bumped into a casual acquaintance. So, even though it isn't proper etiquette, I like to turn it back around on the questioner and make them have to think.
To that end, I like to use these responses:
- Not bad, but the day is young! (used in the morning)
- Ehh...could be worse. (If I'm alive to be talking, this is true).
- Ehh..been worse. (same).
- Not bad. You? (counter-move)
The last is a personal favorite, because it turns the question completely back to the questioner. At least half the time they don't even notice and don't think to answer.
In America, sometimes people don't even respond directly to this kind of question at all. For instance, I've often heard the following format involving a radio interviewer and his guest:
Interviewer: My guest this morning is Mr X from Company Y, who knows about situation Z.
Guest: Hi, how are you doing?
Interviewer: The first thing I want to ask you is [question]
Other answers here have correctly identified the "usual" response to this question. Something along the lines of "fine", "well", or "good, how about you?"
But, just because these are the usual responses doesn't mean that saying something else would be incorrect. For instance, at work these quick interactions are about all the contact I have with most people. So, all I know about their personality is how they respond. The ones that say something other than "fine" seem a lot more interesting.
As long as you keep your response quick so they don't have to stop and listen, go ahead and say whatever you like. If you're not sure, "fine" works just as well as anything.