In literature, a story within a story occurs as a general broad story is used to introduce a different story or stories, this literacy device is known as Frame Narrative as the main story acts as a frame or context for other narratives. One of the most famous examples of the use of frame narrative is the narrative "Canterbury Tales" by Chaucer because this tells the story of a group of Pilgrims that travel to the Canterbury Cathedral (main narrative) but inside this, multiple narratives emerge as the characters decide to begin a story-tale context. Thus, a story within a story used Frame narrative.
You probably need to study the notes that need for the test or ask for practice ones and have a teacher or a classmate help u understand why its the answer <span />