In this sentence, should I use past continuous form of the verb or past simple or it in the gap?
Last night, I was sleeping in my bed, when I ------- (hear) a terrible noise. I ------ (get up) immediately and ------- (run) outside.
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There's nothing continuous/progressive about those actions, so the simple past tense is appropriate:
Last night, I was sleeping in my bed when I heard a terrible noise. I got up immediately and ran outside.
I don't know the technical name for this, but whenever in the past, the action is interrupted by something so you couldn't complete, then you should use the past continuous, like:
I was sleeping - and something woke me up. We were smiling - now we are not.
The actions implied in the verbs were interrupted. The past simple, works when you just DID what the action implied.
You woke up. You heard the noise. You got up at once.
There was no continuous process, you neither were hearing it, nor you were getting up and neither you were running outside, all you did is, just you heard it, you got up and you ran outside. :)
An example for sentence where you were doing something::
Last night when I was sleeping, I was dreaming about ....
Last night, I was sleeping in my bed, when I heard a terrible noise. I got up immediately and ran outside.
More sentence examples :
I was watching TV when I heard a knock on my door.
She was reading a book when the telephone rang.