What type of bonds are issued to finance revenue-producing public enterprises like airports and hospitals?

The correct answer is associated with bonds that are specifically designated for financing revenue-producing public enterprises, such as airports and hospitals. These bonds are known as revenue bonds, or more specifically, Public Enterprise Revenue Bonds. They are issued to fund projects that will generate income for the issuing authority through the operation of the facility, such as through user fees or charges. The key characteristic of these bonds is that they are secured by the revenue generated from the specific project rather than by the taxing power of the government.

This type of financing is essential for public enterprises because it allows them to fund necessary infrastructure improvements or expansions without placing a direct burden on taxpayers. Instead, the repayment of these bonds relies on the income generated by the enterprise after it is completed and operational. This aligns with the needs of facilities that operate on a user-fee basis, distinguishing them from general obligation bonds, which are backed by the full faith and credit of the issuing municipality and its taxing authority.