What is an 'outward sign instituted by Christ to give grace'?

Catholic AnswerThis is directly out of the Baltimore Catechism, number 3, question 574:

Q. What is a Sacrament?

A. A Sacrament is an outward sign instituted by Christ to give grace.

The new Catechism gives this explanation:

from The Catechism of the Catholic Church, second edition, English translation 1994

1084

"Seated at the right hand of the Father" and pouring out the Holy Spirit on his Body which is the Church, Christ now acts through the sacraments he instituted to communicate his grace. The sacraments are perceptible signs (Words and actions) accessible to our human nature. By the action of Christ and the power of the Holy Spirit they make present efficaciously the grace that they signify.