Choose the correct answer. Is she watching TV?

The question uses the present continuous tense ('Is she watching TV?'). The correct affirmative answer should also use the present continuous tense. Therefore, 'Yes, she is.' is the grammatically correct response. The options 'Yes, she does.' and 'No, she does.' use the simple present tense, which is incorrect for this question. 'Yes, she isn't.' is a contradiction.