The correct answer is given in red, but i struggled to understand , please explain it step by step, thank you!

Q1. Missing capital. The textbook treatment of the Phillips curve uses a production function Y = EN which completely omits capital. Why? Partly, this is a simplification to keep the math tidy, but the deeper justification is that we are dealing with the short run (note the chapter title) in which the capital stock cannot be changed, so we can treat it as a constant