Answer each of the following questions.

1. A city operates a municipal health clinic that provides outpatient care for children. The city charges fees for services from those who can afford to pay, bills the state for Medicaid-eligible patients, and subsidizes the clinic to the extent necessary. What type of fund is most suitable for this activity? Why?

2. A state maintains a central printing activity that provides services to all departments. For example, it prints the state budget document, the annual financial report, all the tax forms, and all license documents. What type of fund is most suitable for this activity? Why?

3. Several small governmental units decided to pool their resources to build and operate a regional airport. What type of fund would you recommend for the airport? Why?

4. A city decides to dedicate resources to improving the appearance of its downtown business area. Among other things, it adds 2 percent to its hotel occupancy tax and earmarks it for that purpose. What type of fund is most suitable for this activity? Why?