Stucking on LOOKUP inside INDEX

Can't remember where I downloaded this exercise, now I forget almost the knowledge of Excel's functions and go reading it again but I don't understand what it is, then I need you help for explaining how LOOKUP handles inside INDEX

Normally, LOOKUP function has structure:
LOOKUP(lookup_value, lookup_vector, lookup_result)
But in the cell "I2" of the exercise, LOOKUP function looks like:
LOOKUP(H2,{1,2,3},{2,3,4})
I understand as follows:
H2 = lookup_value
{1,2,3} = ???
{2,3,4} = ???
lookup_vector & lookup_result which I usually see in form: A1:A100, C1:C100 or A1:G100, D1:P100 ... etc.
please help me to clear it up