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In many areas of life, we come across the word "index". But it is not always clear what this term means in this particular case.

Therefore, today we will talk briefly about the index in general (what is it?) And about particular cases of using this term in various fields. Index is a polysemantic and multidimensional term that comes from the Latin language. In general terms, index [index] is a list, register, index, or index.

It is expressed as a combination of letters, numbers, other symbols , and shows what place a certain component of the system occupies within it, for example, a postal code (what is it?). Or it characterizes the dynamic state of the system, showing in which direction it changes. For example, the index of wages, or the index of labor productivity. But since the term in the modern world has acquired many private meanings, it is advisable to find out what an index is only in context (how is it?).

Postcode
A couple of decades ago, the term “zip code” was most often used in conjunction with the adjective “postal”.

It is used by post office employees to sort letters or other mailings. The postal code is six digits in a specific sequence. The first three represent the region and the last three represent the post office number. The postal code is indicated when sending a letter or parcel, and if you make a mistake in its writing, then the delivery time for postal items can significantly increase. The sorting system reads the index, and sends a letter or parcel to the exact region and post office that corresponds to the specified index.

Index in Mathematics and Chemistry
We get the first acquaintance with indexes at school. So, in mathematics and physics, indices are pointers placed in the lower corner of a variable included in a formula, for example, F 1 , or X n . In chemistry, the index shows the number of atoms of a particular substance in a molecule. For example, in a water molecule H 2 O, hydrogen has an index of 2, which means that this molecule has two hydrogen atoms.

There is only one oxygen atom in a molecule, but an index equal to one is not put in the formulas.

What are stock indices
Today, the term index is most often used with terms related to the market (what is that?), For example, "The Moscow Exchange Index sank 2%." What does the index mean here? The very first stock market index is the Dow Jones Index , a convenient financial instrument that has been operating since 1884. At that time, US financiers and economists were faced with the task of assessing the dynamics of the development of American industry. To do this, we needed a convenient and easy-to-calculate indicator that would help assess the state of production, on the rise, or on the decline.

It was decided to take 12 large companies, and calculate the average share price for them, and do this calculation regularly, at regular intervals.

According to this indicator, it became convenient to build a time schedule, according to which the dynamics were perfectly traced. The rise in the index meant that the entire industry was on the rise, and the decline indicated a recession.

Over time, the Dow Jones index became more complex , began to be calculated for different industries, overgrown with various correction factors, but continues to be actively used.

Today in the United States, it is calculated based on the value of shares of the 30 largest industrial companies.

Together with it, the S&P 500 index plays an important role . It is calculated for 500 high-cap US companies. The composition and weight of the indices is reviewed several times a year.

In other countries, there are essentially similar indices: DAX for Germany, Nikkei 225 for Japan. Thus, in the economy, indices are indicators of the development of both the entire economy as a whole and its individual sectors.