Which type of federal grant places the fewest restrictions on how the recipient government spends the money?
ACategorical grants
BMatching grants
CRevenue sharing
DProject grants
Answer & Solution
Correct answer: C. Revenue sharing
1. Federal transfers form a spectrum according to how much discretion the recipient keeps.
2. Categorical grants sit at the restrictive end, limiting discretion through strict administrative criteria and often requiring matching funds.
3. Block grants come with less stringent conditions and give recipients more flexibility.
4. Recipients of general revenue sharing faced the least restrictions of all; that programme ran from 1972 until it was abolished in 1986.
_Source: OpenStax American Government 3e (CC BY 4.0), Ch 3 "American Federalism", §3.3 Intergovernmental Relationships_
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