Below are sales data, in nominal dollars, for Safeway, the supermarket chain, from 1981 through 2004 (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 2004 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?

Year Sales CPI Sales CPI 1981 982 1983 1984 985.. 986. 1987 988 1989 1990 1991 992 $6580 90.9 96.5 99.6 103.9 107.6 109.6 113.6 118.3 14.325 124.0 14,874 130.7 136.2 5,152 140.3 993.. 994 1995.. 1996 997 1998 1999 2000 2001 2002 2003 2004 $15,215 144.5 7.633 18.585 19,642 19,65 20,312 18.301 13,612 15.627 48.2 16,398 1524 156.9 22.484 60.5 24.484 63.0 28,860 66.6 ,977 72.2 34,301 177/ 7 179.9 35.727 184.0 35.823 88.9 17.269 7 34.917 15.119