A story with elements that have both literal and figurative meanings is

Step 1: Analyze the question The question asks for a type of story whose elements (characters, events, settings) work on two levels: the literal (the surface story) and the figurative (a deeper, symbolic meaning).

Step 2: Explain the concepts

• Allegory: A story in which characters, events, and settings symbolize deeper moral, political, or spiritual ideas. It can be read literally as a story and figuratively for its hidden meaning. Examples: Animal Farm by George Orwell (the animals' revolt represents the Russian Revolution) and The Pilgrim's Progress by John Bunyan.
• Fable: A short story, usually with talking animals, that teaches a moral lesson (e.g., the tortoise and the hare). It is related to allegory, but its defining feature is a short moral tale, not sustained dual-level meaning throughout.
• Novella: A prose fiction of medium length, longer than a short story but shorter than a novel. It describes length, not meaning.
• Epistle: A letter, or a literary work written in the form of a letter. It describes form, not meaning.

Step 3: Eliminate the options

• C (novella) is about length, so it is out.
• D (epistle) is about letter form, so it is out.
• B (fable) is mainly defined by its moral lesson and often animal characters, not by the layering of literal and figurative meaning.
• A (allegory) is defined by exactly this two-level meaning.

Step 4: Answer The correct option is A. an allegory.

Exam tip: Link allegory with "allegory = a story with a hidden meaning". Think of Animal Farm: it is a farm story on the surface, but a political story underneath. If a question mentions both literal and symbolic/figurative levels, choose allegory.