Money granted by the federal government to the states for a broad purpose, such as transportation, is called a ...

• A. Block grant
• B. General revenue sharing
• C. Categorical grant
• D. Project grant

Answer: (A)

Block grants give states money for broad purposes and let them decide how to spend it within that general area, like transportation. The key idea is flexibility: the federal government sets the overall category and allowed uses, but states choose exactly how to allocate the funds across transportation needs, maintenance, and related projects. This contrasts with targeted, narrowly defined funds that must go to specific programs (categorical grants) or to a particular project with competitive selection (project grants). General revenue sharing was a looser, older arrangement with minimal constraints, but the modern term for broad, flexible funding for a broad purpose is block grant, which is why this is the best fit.