Final answer:
The correct answer is a) Exacerbated.
Step-by-step explanation:
The correct answer is a) Exacerbated. The word 'exacerbated' means to make a situation worse or more severe. In this context, the owner made the situation worse by encouraging the terrier to romp in the neighbor's petunias, exacerbating the tension between the two parties. The word 'razed' means to completely destroy or demolish, which does not fit the context of the sentence. Therefore, the correct answer is 'a) Exacerbated'.