Below are sales data, in nominal dollars, for Safeway, the supermarket chain, from 1981 through 2007 (in millions of U.S. dollars). In addition, the consumer price index (CPI) for each year is given (1982€“1984 = 100).

Nominal dollar sales are just the regular sales as reported. Constant dollar sales are sales adjusted to the price level of a common comparison year in order to remove the distortions caused by inflation. Nominal dollar sales are converted into constant dollar sales by dividing by the price index for the year in which the sales were made and multiplying by the price index in the comparison year.
1. Use the CPI to restate all the Safeway sales numbers in terms of 2007 dollars.
2. In terms of nominal dollar sales, Safeway€™s sales have been growing steadily since 1988. Do the constant dollar sales data give the same picture? Explain.
3. In the latter part of 1986, Safeway underwent a leveraged buyout and began to get rid of a number of its stores. Is there any evidence of this in the nominal dollar sales data? In the constant dollar salesdata?

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Year Sales CPI Year Sales CPI 1981 $16580 90.9 1995 $16,398 1524 7,269 56.9 22484 160.5 24,484 1630 28,860 166.6 31,977 72.2 7.633 8,585 19.642 96.5 1983 984 1985 1986 987 1988 1989 990 1991 1992 1993.-. 1994 997 1998 1999 2000 200 2002 2003 2004 2005 2006 2007 103.9 19.65 1076 20,312 09.6 18.30 3,612 18.3 14.325 24.0 4,874 30.7 15.119 136.2 15.152 40.3 15.215 445 15.627 148.2 34301 177. 4.917 79.9 35,727 184.0 35,823 188.9 38416 195.3 40,185 201.6 207.3 42,286