Solution 1:

Your new user's login shell has been set to /bin/sh, which on Ubuntu is dash. This is a shell intended to be small and fast, to run scripts efficiently. It doesn't have any interactive features. Change your shell to zsh (better) or bash (more common):

chsh -s /bin/bash

If you want to change adduser's default shell, edit /etc/adduser.conf:

DSHELL=/bin/bash