Angular diameter is a measure of how large something "appears to be". An object's angular diameter α is proportional to its size (linear diameter) and inversely proportional to how far away it is (distance).
An object with linear diameter of 2 units and a distance of 40 units has an angular diameter of 10313.3 arcsec (which is almost 3°). Note that it doesn't matter what units are used for linear diameter and distance, as long as they are the same.
Please verify these relationships in the simulation below: