"용 두 마리가 거리에 있어요."
Translation:There are two dragons on the road.
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I had the same doubt so I searched about it. Came across this good explanation.
TL;DR 길 can refer to just about any road, even metaphorical/figurative, but 거리 usually refers to a 'city street'.
In my opinion 'road' is a more general term, while 'street' is specific to a paved surface, usually in a city. For example, i wouldn't call a surface made of dirt or gravel that people travel on a 'street', but i would call it a 'road'. However, in most cases the two words are interchangeable and i would hope duo accepts them both. Seems overly picky to do otherwise.