Yes you can. A native Urdu speaker here, learning Hindi scrip. Kya veh Bharat maiN rehti ya Amrika maiN ....is perfectly a correct question.
I think "Is she living in India or in America?" should also be acceptable unless someone can explain why it is incorrect.
They are just practicing a direct and exclusive (or near-exclusive) mapping of Hindi's habitual aspect to English's habitual. Although the English progressive sounds OK with this verb, it seems like it would be bad practice (especially given the Duolingo method of asking learners to infer grammar) to allow learners potentially fail to distinguish the tenses.
In this sentence what word causes this to become a question instead of a statement? Without the question mark at the end, I would have thought the sentence said "She lives in India or in America".
No word this time. The question mark and the intonation of the voice is used to indicate a question here.
What is the exact difference between to live and to stay? Selon moi, Habiter - to stay is रहना and to live vivre is जीना. Still, the given English translation is also correct.
जीना has to do with the state of being alive, vs. dead!
रहना is "to reside". So yes, it is "to stay" I guess, but in my dialect of English (American) we say "live". When we say "stay", it implies more temporary residence, which is hindi is like ठहरना!
In sum: जीना - be alive रहना - reside ठहरना - lodge