A story with elements that have both literal and figurative meanings is
The correct answer is A. an allegory
Allegory is a narration or description in which events, actions, characters, settings or objects represent specific abstractions or ideas. Allegory generally operates on two levels as a literary device. The overt or surface narrative/description is meant to have enough literary elements to be a standalone work that is interesting and/or entertaining by itself. However, the emphasis of allegory is typically placed on the abstract ideals represented or symbolized by the work's literary elements. In other words, the meaning behind the surface narrative has even greater value as a literary work. Though many allegories are intended to be didactic in providing a moral, ethical, or religious lesson, not all allegories set out to achieve this goal.
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