Algorithm = A process or set of rules for calculation or problem-solving, esp. in computing." Concise Oxford Dictionary.
I have NEVER heard it used for some specific form of computing or methodology. I suspect it is just a general description. They are suggesting a solution that shows the steps or successive rules needed to achieve it.
In functional programming, it would be logical rules to be used in the 'functions'.
In declaritive programming in is much the same but applied to the 'side effects' that are inevitable.
In OO computing, it nearly always describes the steps required within a 'method'. At the higher levels, the use cases are somewhat 'Actor' dependant, and each one may have different rules.
You can write algoithms using a number of logic languages, usually always based on Predicate Calculus'.
[tab]'Z' a predicate calculus based logic language
[tab] 'OCL' UML's formal language for this (ghastly unreadable - Ugh)
[tab] 'Activity Diagrams' very often work very well. NOT activity diagrams with swimlanes, as you draw for business processes, but 'Activity Diagrams' that apply a set of logic just to one method.
Avoid activity diagrams with swim lanes or sequence diagrams.
I suspect you are being asked for an answer in general but described in a precise form that well fits any form of predicate calculus description. Just the sequential logic without any detail of how it is going to be programmed.
Gil