Which type of municipal bond is backed by the full faith and credit of the issuer?

The type of municipal bond that is backed by the full faith and credit of the issuer is the general obligation bond. These bonds are typically issued by municipalities to fund public projects and are secured by the issuer's taxing power. This means that the issuer commits to using its tax revenues and other resources to repay the bondholders, creating a strong assurance of repayment.

General obligation bonds are often viewed as less risky compared to revenue bonds, which rely on the income generated from specific projects or sources, such as tolls or utility fees, for repayment. Because general obligation bonds are backed by a broader pool of financial resources and the government's ability to tax, investors generally feel more secure when investing in these securities.

In contrast, IDR bonds are issued for industrial development purposes and are not backed by the issuer's general taxing power. Bearer bonds are simply a type of bond that is payable to the bondholder in person and does not hold any specific backing related to municipal obligations. Therefore, the correct answer highlights the security and credibility associated with general obligation bonds in the municipal bond market.