Answer: the distant star is moving toward us.
Justification:
This question deals with the Doppler's effect.
First, it is good to remember that the frequency and wavelength are inversely related. In the case of light, frequency = speed of light / wavelength, f = c / λ.
The Doppler's effect is the apparent change in the frequency of a sound or electromagnetic wave (light is an elctromagnetic wave) due to the relative motion between the observer and the source: if the source is moving away of the observer, the wavelength will be perceived as longer (lower frequency); if the source is moving toward the observer, the wavelenght is perceived shorter (higher frequency).
The apparent shortening of the wavelength on the line of the hydrogen spectrum, from 650 nm to 649 nm (equivalent to an increase of the frequency), indicates that the source (the star) is moving toward the observer (us).
This is known as blueshift, because the line is shifted to the blue or violet end of the spectrum (higher frequency). When the line is shifted to the red end of the spectrum it is called redshift (lower frequency).
