The obvious solution is to pay back on an installment plan.  Presumably the lender is seeking wealth, so he'll spend (or loan or whatever) some pennies back into circulation.  That way the borrower can purchase a penny on the market.  The word "circulation" means "movement".  If the lender expects to be paid back with the same 100 non-fungible pennies he created, plus one more that doesn't exist, he'll have a hard time finding a borrower to accept that deal and there will be no movement.

The less obvious solution is to punch the person asking the question.  They obviously think that this question illustrates some deep principle of the modern world, but all that it illustrates is that they were fooled by a trick question that shouldn't stump a 10 year old.

Oh, and Steve Keen did a lecture on this topic.  Check his website for the video.  He ran simulations of a closed economy with a fixed amount of money, and they ran just fine.  Debt with interest didn't wreck up the place or anything silly like that.