A multimeter is a portable instrument used to directly measure electrical quantities like current, voltage, and resistance. It can measure both direct and alternating current over various ranges. Multimeters contain either analog or digital displays and use a sensitive galvanometer and specific electrical circuits to measure different electrical values. They are very versatile tools that are important for measuring electrical quantities in circuits, determining characteristics like resistance, capacitance and inductance, and identifying causes of faults in electrical appliances.