Final answer:
The passage is a literal statement categorizing Paul Bunyan as a character in American tall tales, and it does not contain exaggeration or hyperbole.
Step-by-step explanation:
The statement 'Paul Bunyan is a character in American tall tales' is a literal description rather than hyperbole. Paul Bunyan is indeed a character from American folklore and the phrase does not exaggerate or use embellishment to describe Paul Bunyan or his tales. Tall tales are a type of story that often features hyperbolic elements, with characters performing exaggerated feats, but the sentence in question simply categorizes Paul Bunyan as part of that genre.