Yes, exactly, in questions the order is inverted. The main verb first, the subject second. Before that there can come an interrogative phrase like was, wo, for example:
Was heißen Sie? = what is your name?
You might want to check out the section called "Interrogative Sentences (Fragesätze)" under this link.
You can check the tips in the Questions lesson.
In summary, yes/no question are formed by changing the word order to verb-subject-object. Wh-questions (or W-Fragen) starts with the W-Wort and then the verb-subject-object order is used.
Ich verkaufe im Markt Kartoffeln (S-V-O, positiver Satz)
Verkaufst du im Markt Kartoffeln? (V-S-O, Ja/Nein-Frage)
Was verkaufst du im Markt? (W-V-S-O, W-Frage)
Not a native, correct me if something is wrong.
It thinks you're talking about the race, when you are supposed to be talking about the country. The only question you could ask like this is, "Are you American?" Because being American doesn't mean you're literally a Native American or Indian, but it means that you live there.
So the answer does not necessarily have to be ungrammatical to be rejected, but it can be rejected too if it's not the usual way of saying it?
Classical example: translating "good afternoon" to guten Nachmittag -- grammatically fine, but nobody says it. It would be like saying "good dawn" in English: also grammatically fine but nobody says that.