The idea behind the multiplicative identity is that it returns the input as it is.
x×1=x
For numbers 1 is the multiplicative identity.
Similarly, for matrices I is the multiplicative identity.
AI=A
Multiplicative Inverse
The idea behind the inverse is can you find a corresponding number/matrix such that when multiplied with the original number/matrix, it returns the multiplicative identity.
xy=1=yx⟹y is the inverse of x (and vice versa)AB=I=BA⟹B is the inverse of A and vice versa.
Constraints on shape of A,B
Because AB=I=BA both A,B have to be square matrices of equal sizes.