Step 1: Understanding the Concept:
The order is the highest derivative present. The degree is the power of the highest order derivative after the equation has been made a polynomial in the derivatives.
Step 2: Key Formula or Approach:
Square both sides to remove the outer square root, then clear the fraction.
Step 3: Detailed Explanation:
Given
\[ \sqrt{1 + \frac{1}{(y')^2}} = (y'')^{3/2} \]
Square both sides:
\[ 1 + \frac{1}{(y')^2} = (y'')^3 \]
Multiply through by \((y')^2\):
\[ (y')^2 + 1 = (y')^2\,(y'')^3 \]
Now every derivative has an integer power. The highest derivative is \(y''\), so the order is 2. Its power is 3, so the degree is 3.
Order 2 with degree 2 in option (B) and the order 3 options (C) and (D) do not match: there is no third derivative anywhere.
Final Answer:
The order is 2 and the degree is 3, option (A).
\[ \boxed{\text{Order 2, Degree 3 (A)}} \]