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The phrase "that's much better" is grammatically correct and can be used in written English.
It is typically used to express approval or satisfaction with something that has improved. For example: "I appreciate the changes you made to the presentation, that's much better now." "We had a rough start, but the situation has been resolved. That's much better." "Thank you for fixing the typo, that's much better than the original version."
Exact(50)
Vidor finds something in Rand's work that's much better than what Rand put in: mad rhetorical ecstasy.
Like Samuel Hullick points out in his teardown of Peach's user onboarding flow, that's much better than the default silhouette and [username not entered].
Sometimes you come across a story that's much better as a written piece.
They're out there, all day, determinedly trying to flog us a way of life that's much better when you're very serious about love and matching trilbies.
And that's something else that's much better here than in the Spanish-dubbed 1970s, when, on the few times it does venture out of doors, it's drab and grey.
Wow, that's MUCH better than a stupid alarm clock or gold fountain pen.
Similar(8)
I'm not sure that is much better.
He's going to hand over an Iraq that is much better than it was two years ago".
Otherwise you're in for a slog of workplace battles that are much better finessed.
The drop in February followed an increase in January that was much better than initially reported.
He created a final career that was much better than his presidential one.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com