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dreamzcometrue
In GMAT SC, we often come across the word "That". That is mainly used for two purposes.

1) Noun modifier: That is one of the relative pronoun modifier that modifies the noun it follows.
eg: The place that is famous for best burgers is closed.

2) Clause connector: That acts as a clause connector for two independent clauses.
eg: The research suggests that moon's temperature is cooler than earth's.
And there is a third usage as well:

3) Demonstrative pronoun.

For example:

My house is bigger than that of my neighbor.

p.s. Our book EducationAisle Sentence Correction Nirvana discusses the various "avatars" of "that", their application and examples in significant detail. If you or someone is interested, PM me your email-id; I can mail the corresponding section.

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