What is a defining feature of a general obligation bond?

A general obligation bond is characterized by being backed by the issuing government's full faith and credit, which means that the government commits to using its financial resources, including tax revenues, to repay the bondholders. This type of bond is typically issued for public purposes and can finance various projects, such as infrastructure improvements, schools, or parks, as it does not depend on a specific income stream for repayment.

The commitment to repay is a significant assurance to investors, making general obligation bonds generally considered safe investments. This backing through the government's financial capabilities further distinguishes these bonds from revenue bonds, which are dependent on specific revenue sources like fees from a project.

In contrast to other options, general obligation bonds are not limited to infrastructure projects alone, they do involve government backing, and they are not restricted to state governments as they can also be issued by local municipalities.