Should people say yes and really mean no in order to not insult or embarrass other people?
While some people would say that honesty is the best policy, I think that there are many times when it is important to tell “white lies.” This is particularly true when people ask questions that they really should not have asked.
I do not think that there is usually much point in telling people truths that will hurt their feelings. For example, if your friend asks you if you like their new outfit (which they clearly love), it is pointless to tell them you do not. You might not like it, but if they do, there’s no harm.
Of course, this doesn’t extend to telling them lies that will hurt them. But in most cases like this, white lies are not going to hurt and so they are better than being frank and hurting people’s feelings.