Final answer:
Internal storytelling involves the audience using their imagination to understand the thoughts and motivations of the characters in a story.
Step-by-step explanation:
The term that describes the situation where the audience sees and hears the physical world of the story, but needs to use their imagination to understand the thoughts and motivations of the characters is called internal storytelling. In internal storytelling, the audience is presented with external events and actions, but it is up to them to interpret the inner thoughts and motivations of the characters. This creates a deeper engagement with the story and allows for varying interpretations based on individual perspectives.
Learn more about Internal storytelling