Final answer:
Government policy can encourage investors to take risks by intervening in the market to set price floors or offer incentives, leading to increased market activity in higher-risk areas.
Step-by-step explanation:
When government policy moves the price in a manner that encourages investors to take risks, the price likely changes to promote investment by either setting a floor to prevent it from going too low, which may create a safety net for investors, or by providing subsidies or tax incentives to reduce investment costs. These interventions can lead to investors entering markets they may have previously avoided due to higher risk, thus potentially stimulating economic activity. For instance, if the government sets a minimum price on agricultural products, farmers might be encouraged to invest in their operations knowing they will receive a guaranteed price. Similarly, if the government offers tax breaks for investing in renewable energy, it could lead to an increase in investments within that sector despite the risks involved.