A lot of people say "I'm good" but it sounds better if you say "I'm doing well" Of course you can answer with "I'm tired" "I'm hungry" or however you are feeling at the moment If you answer "I'm fine" that gives the implication that you don't want to talk anymore.

For the opening sentences in a conversation, just stick to the ritual. There's no reason to be creative, and no expectation of actually learning anything. The answer to "How are you?" is simply "Fine, thank you, how are you?" A friend of mine said his parents had actually taught him a poem: "Don't tell Aunt Mabel about your indigestion; 'How are you?' is a greeting, not a question." In normal conversation in the US, between people who are friends or work colleagues or who see each other frequently, the information will emerge a little while later. They will say "I've had a rough day" or "I'm getting over the flu" early in the conversation--but not in response to "How are you?"

It's a phatic expression meaning it generally has more to do with a social contract than a request for actual information. Therefore, your response depends on the environment and your relation to the asker. As Rebecca stated, if you say, "Fine." without asking the other person how they're doing, you're basically implying that you don't want to continue the conversation with them. You might not like them or simply don't have time for the conversation. In a formal setting - such as talking to a person in senior management - you would probably say, "I'm doing well. Thanks." In that situation "Fine." might be too informal. You would probably abstain from asking how they are as that might be pushing things a bit. But again, it depends on your relationship with that manager and the environment of the company. In an informal setting with a peer, you could say, "Fine. How are you?". Again, it's phatic and neither party typically wants to engage in a full-on conversation. It's "small talk", or pleasantries, meant to be polite.

There is no 'right' answer. Perhaps this is a cultural difference, but it is common for people to reply in all sorts of different ways. Rebecca gave a few possible answers. Some others are 'I'm great' and 'I'm OK'. Here in New Zealand, it is common to answer 'not bad', which is similar to the Chinese 不错。 You can add 'thanks', or 'thank you' if you like. You could add 'and you?' if you like. You could even use slang terms such as 'choice', 'a box of fluffies' or 'tickety-boo' if that is suitable in the context.

Fine. Thank you. How are you?