Final answer:
A negative supply shock that raises production costs results in the aggregate supply curve shifting up, not affecting the aggregate demand curve. Therefore, the correct option is D.
Step-by-step explanation:
A negative supply shock that raises production costs will cause the aggregate supply curve to shift up. This is because such a shock, like a sudden increase in the prices of raw materials or labor, makes production more expensive at all levels of output, hence reducing the quantity of goods and services that a business is willing to supply at any given price. This shift in the aggregate supply curve, graphically represented as an upward (or leftward) movement, results in a higher price level and a lower quantity of goods and services produced. The correct answer to the question therefore is option (d. aggregate supply curve to shift up).