Final answer:
True, a federal grant for a state to build a specific dam is a categorical grant, which is designed for a specific purpose with strict rules on fund usage.
Step-by-step explanation:
A federal grant to help a state build a specific dam would indeed be a categorical grant. Such grants are federal transfers that limit recipients' discretion in the use of funds and are subject to strict administrative criteria. A categorical grant is designed to be used for a specific purpose, and the receiving state or local government must follow the rules that are attached to how the funds are to be spent.
Examples of such grants include funding specific infrastructure projects like dam construction, educational purposes, or urban renewal. By comparison, block grants offer more flexibility, allowing states to use the funds for a broader range of purposes with fewer restrictions.