1. First, Acknowledge that your child is asking a good question. This gives you a minute to breathe when they ask something like, "Where do babies come from?" Use a phrase like, "Interesting question," "Wow, that's a thoughtful question," or "Great question," to let your child know that they are, indeed, asking something important.
2. Second, Ask a question to clarify what your child is really asking, or to figure out the context of where they heard something that prompted the question. "What do you know about that?" Where did you hear this?" (be careful this is said in an inquisitive way, not accusative). "What was happening when you heard this?" Tell me what you know about ......" "What do you mean by that?"
3. Last, Answer their question. If you can't answer it directly, or don't know how to answer it well, ask them if you can get a book about it at the library, or look it up together. If you can answer it directly, make sure you keep your explanation simple and direct. Young kids can only handle about one or two pieces of a process at a time.