Does that mean you are not happy?

- No.
1. No, I am not happy.
2. No, I don't mean I am not happy.

(If the other person answers ' No', does 'no' mean #1 or #2?)

number 1 it means no, i am not happy

True. But in Japanese, for example, in answer to a negative question, where the answer agrees, it would be: Yes. I am not happy!

Sra

It means #2.

If the other person answers "No" to the question "Does that mean you are not happy?", it could mean either #1 or #2. The meaning will depend on the context of the conversation and the tone in which the response is given. In order to determine the intended meaning, it would be necessary to consider the overall context of the conversation and any additional cues from the speaker.