Consider the following extension to context-free grammars that permits rules to have in the left-hand side, one (or more) terminal on the right side of the non-terminal. Tha
Yup it's type 0 I think. Principle for first 3 types (3, 2 and 1) is that those can't perform reduction. Those are generative only types.
Here you can transform a terminal into epsilon so it's type 0.