What does this question mean?

Question

Does our current outlook towards other cultures reflect the reality or is it based on stereotypes and our tendency to label and categorize things?

Answer 1

It means your teacher needs a reality check on communication with teens.

I will put it in teen talk:
Does our view of other cultures depend on the truth about them, or does it reflect our mind depending on convenient labels, generalizations, and stereotypes?

Answer 2

It's asking if our opinion about others is based on fact or stereotypes.

Are all Muslims violent?
Are all rich people greedy?
Are all Asians top students?

Answer 3

I would add to the good advice above that when you encounter words in a question like this that you do not understand, look them up. That's part of learning, too. "Stereotype" and "categorize" are not used much in everyday teen-speak, but are good words to know.