But what does it mean when it asks "Back up your explaination by writing out each step in the code."??
I think it means go through the method as if you were the program. So, what happens when multiply(8) is called? 8 is not equal to zero, and the remainder of 8 / 2 is not 1, either, so the program will go to the last option: 8 * multiply(8-2). What happens after that? You can go through the same thought process as I showed for 8 above and continue expanding the answer until you get a definite result.
Doing that should not only answer part b, but show you the answer to part a too.