Which type of bond is characterized by being part of a government bond issue?

Private activity bonds are indeed a type of bond that can be part of a government bond issue. These bonds are issued by or on behalf of local or state governments to finance projects that have a significant public benefit. While they serve private entities, the issuing authority must ensure that a certain threshold of the project is for public use or benefit, hence the connection to government bond issuance.

Private activity bonds are commonly utilized for purposes like housing, transportation, and education projects, which may involve private companies but are backed by the government to foster public infrastructure and services. This characteristic distinguishes them from corporate bonds, which are issued by companies for their own financing needs, and savings bonds, which are government-issued bonds designed for individual investors but function differently in terms of usage and benefits. Tax-exempt bonds also relate to government financing, but they generally refer to bonds where the interest earned is exempt from federal income tax, which broadens the scope beyond just private activities.