The given statement describes the second derivative test, which is used to analyze the behavior of a function around a critical point \( x^* \).
If \( f'(x^*) = 0 \) and \( f''(x^*) > 0 \), then \( x^* \) is a local minimum of the function \( f \).
This means that around the point \( x^* \), the function \( f \) decreases to the left of \( x^* \) and increases to the right of \( x^* \), indicating a valley or a bottom point in the graph of \( f \).
Therefore, the correct answer is:
A. local minimum.