Solution 1: -- World Trade Organisation (WTO)

 The WTO was founded in 1995.

 It is the successor organisation to the General Agreement on Trade and Tariff (GATT).
 On 1st January 1995, 123 nations signed the agreement to replace the General Agreement on
Trade and Tariff (GATT).
 At present, there are 164 member countries of WTO.
OBJECTIVES
1. To set and execute rules for international trade
2. To present a panel for negotiating and controlling additional trade liberalization
3. To solve trade conflicts
4. To improve the clarity of decision-making methods
5. To raise the standard of living in member countries.
6. Development of a multilateral trading system.
7. To reduce Tariff and Non-Tariff barrier.
8. To eliminate discriminatory treatment in international trade relationships.
9. To make coordination between trade policies, environmental policies and sustainable
development
FUNCTIONS OF WTO
1. It facilitates international trade through the removal of tariff and non-tariff barriers.
2. It provides greater market access to all member countries.
3. It establishes a rule-based trading regime, in which nations cannot place arbitrary restrictions
on trade.
4. It frames fair global rules, regulations.
5. It safeguards and advocates the interests of the developing world.
6. It is also responsible to increase production and trade of services.
7. It ensures optimum utilisation of world resources.

Solution 2: -- Foreign Exchange Rate

Foreign Exchange Rate is defined as the price of the domestic currency with respect to another
currency. The purpose of foreign exchange is to compare one currency with another for showing
their relative values.
Foreign exchange rate can also be said to be the rate at which one currency is exchanged with
another or it can be said as the price of one currency that is stated in terms of another currency.
Exchange rates of a currency can be either fixed or floating. Fixed exchange rate is determined by
the central bank of the country while the floating rate is determined by the dynamics of market
demand and supply.
TYPES OF EXCHANGE RATE SYSTEMS
1. Fixed exchange rate System or Pegged exchange rate system: The pegged exchange rate or
the fixed exchange rate system is referred to as the system where the weaker currency of the two
currencies in question is pegged or tied to the stronger currency.
Fixed exchange rate is determined by the government of the country or central bank and is not
dependent on market forces.
To maintain the stability in the currency rate, there is purchasing of foreign exchange by the central
bank or government when the rate of foreign currency increases and selling foreign currency when
the rates fall.
This process is known as pegging and that’s why the fixed exchange rate system is also referred to
as the pegged exchange rate system.
Advantages of Fixed Exchange Rate System
Following are some of the advantages of fixed exchange rate system

1. It ensures stability in foreign exchange that encourages foreign trade.

2. There is a stability in the value of currency which protects it from market fluctuations.
3. It promotes foreign investment for the country.
4. It helps in maintaining stable inflation rates in an economy.

Disadvantages of Fixed Exchange Rate System

Following are some of the disadvantages of the fixed exchange rate system
1. There is a constant need for maintaining foreign reserves in order to stabilise the economy.
2. The government may lack the flexibility that is required to bounce back in case an economic
shock engulfs the economy.
2. Flexible Exchange Rate System: Flexible exchange rate system is also known as the floating
exchange rate system as it is dependent on the market forces of supply and demand. There is no
intervention of the central banks or the government in the floating exchange rate system.
Advantages of Floating Exchange Rate System
Following are the advantages of the floating exchange rate system
1. There is no need to maintain foreign reserves in this exchange system.
2. Any deficiencies or surplus in Balance of Payment is automatically corrected in this system.

Disadvantages of Floating Exchange Rate System

Following are some of the disadvantages of the floating exchange rate system
1. It encourages speculation that may lead to fluctuations in the exchange rate of currencies in the
market.
2. If the fluctuations in exchange rates are too much it can cause issues with movement of capital
between countries and also impact foreign trade.
3. It will discourage any type of international trade and foreign investment.
3. Managed floating exchange rate system: Managed floating exchange rate system is the
combination of the fixed (managed) and floating exchange rate systems. Under this system the
central banks intervene or participate in the purchase or selling of the foreign currencies.
Solution 4: -- Porter's Five Forces
Porter's Five Forces is a model that identifies and analyses five competitive forces that shape every
industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is
frequently used to identify an industry's structure to determine corporate strategy.
These forces include the number and power of a company's competitive rivals, potential new market
entrants, suppliers, customers, and substitute products that influence a company's profitability.
Five Forces analysis can be used to guide business strategy to increase competitive advantage.
Porter's 5 forces are:
Competition in the industry
The first of the Five Forces refers to the number of competitors and their ability to undercut a
company. The larger the number of competitors, along with the number of equivalent products and
services they offer, the lesser the power of a company.
Suppliers and buyers seek out a company's competition if they are able to offer a better deal or
lower prices. Conversely, when competitive rivalry is low, a company has greater power to charge
higher prices and set the terms of deals to achieve higher sales and profits.
Potential of new entrants into the industry
A company's power is also affected by the force of new entrants into its market. The less time and
money it costs for a competitor to enter a company's market and be an effective competitor, the
more an established company's position could be significantly weakened.
An industry with strong barriers to entry is ideal for existing companies within that industry since
the company would be able to charge higher prices and negotiate better terms.
Power of suppliers
The next factor in the Porter model addresses how easily suppliers can drive up the cost of inputs. It
is affected by the number of suppliers of key inputs of a good or service, how unique these inputs
are, and how much it would cost a company to switch to another supplier. The fewer suppliers to an
industry, the more a company would depend on a supplier.
As a result, the supplier has more power and can drive up input costs and push for other advantages
in trade. On the other hand, when there are many suppliers or low switching costs between rival
suppliers, a company can keep its input costs lower and enhance its profits.
Power of customers
The ability that customers have to drive prices lower or their level of power is one of the Five
Forces. It is affected by how many buyers or customers a company has, how significant each
customer is, and how much it would cost a company to find new customers or markets for its
output.
A smaller and more powerful client base means that each customer has more power to negotiate for
lower prices and better deals. A company that has many, smaller, independent customers will have
an easier time charging higher prices to increase profitability.
Threat of substitute products
The last of the Five Forces focuses on substitutes. Substitute goods or services that can be used in
place of a company's products or services pose a threat. Companies that produce goods or services
for which there are no close substitutes will have more power to increase prices and lock in
favorable terms. When close substitutes are available, customers will have the option to forgo
buying a company's product, and a company's power can be weakened.
Understanding Porter's Five Forces and how they apply to an industry, can enable a company to
adjust its business strategy to better use its resources to generate higher earnings for its investors.
Solution 5: -- International Monetary Fund
The International Monetary Fund (IMF) is an international organization that aims to accomplish a
number of different goals. These include reducing global poverty, encouraging international trade,
and promoting financial stability and economic growth.
The organization was created in 1945 and is based in Washington, DC. There are a total of 190
member countries, each of which is represented on the group's board.
This representation is based on how important its financial position is in the world, so stronger,
more powerful countries have a greater voice in the organization than nations which are much
weaker.
The IMF functions in three main areas:
1. Overseeing the economies of member countries
2. Lending to countries with balance of payments issues
3. Helping member countries modernize their economies
Role of IMF: -
Monitoring Member Country Economies
The International Monetary Fund's primary job is to promote stability in the global monetary
system. So, its first function is to monitor the economies of its 190 member countries. This activity,
known as economic surveillance, happens at both the national and global levels. Through economic
surveillance, the IMF monitors developments that affect member economies as well as the global
economy as a whole.
Member nations must agree to pursue economic policies that coincide with the IMF's objectives. By
monitoring the macroeconomic and financial policies of its member countries, the IMF sees stability
risks and advises on possible adjustments.
Lending
The IMF lends money to nurture the economies of member countries with balance of payments
problems instead of lending to fund individual projects. This assistance can replenish international
reserves, stabilize currencies, and strengthen conditions for economic growth. The IMF expects the
countries to pay back the loans, and the countries must embark on structural adjustment policies
monitored by the IMF.
Lending through the IMF takes two forms. The first is at non-concessional interest rates, while the
other comes with concessional terms. The latter is advanced to countries with low income, and bears
very low or no interest rates at all.
Technical Assistance
The third main function of the IMF is through what it calls capacity development by providing
assistance, policy advice, and training through its various programs. The group provides member
nations with technical assistance in the following areas:
1. Fiscal policy
2. Monetary and exchange rate policies
3. Banking and financial system supervision and regulation
4. Statistics
The organization aims to strengthen human and institutional capacity. This is very important for
countries with previous policy failures, weak institutions, or scarce resources. Through capacity
development, member nations can help strengthen and improve growth in their economies and
create jobs.
World Bank
 The World Bank is an international organization that provides financing, advice, and research
to developing nations to help advance their economies.
 The World Bank and International Monetary Fund (IMF)—founded simultaneously under the
Bretton Woods Agreement—both seek to serve international governments.
 The World Bank has expanded to become known as the World Bank Group with five
cooperative organizations, sometimes known as the World Banks.
 The World Bank Group offers a multitude of proprietary financial assistance, products, and
solutions for international governments, as well as a range of research-based thought
leadership for the global economy at large.
 The World Bank's Human Capital Project seeks to help nations invest in and develop their
human capital to produce a better society and economy.

Functions of the World Bank

 It helps the war-devasted countries by granting them loans for reconstruction.

 Thus, they provide extensive experience and the financial resources of the bank help the poor countries
increase their economic growth, reducing poverty and a better standard of living.

 Also, it helps the underdeveloped countries by granting development loans.

 So, it also provides loans to various governments for irrigation, agriculture, water supply, health, education,
etc.

 It promotes foreign investments to other organizations by guaranteeing the loans.

 Also, the world bank provides economic, monetary, and technical advice to the member countries for any of
their projects.

 Thus, it encourages the development of of-industries in underdeveloped countries by introducing the

various economic reforms.

Objectives of the World Bank

 This includes providing long term capital to its member nations for economic development and
reconstruction. 
 Thus, it helps in inducing long term capital for improving the balance of payments and thereby balancing
international trade.

 Also, it helps by providing guarantees against loads granted to large and small units and other projects for
the member nations.

 So, it ensures that the development projects are implemented. Thus, it brings a sense of transparency for a
nation from war-time to a peaceful economy.

 Also, it promotes the capital investment for member nations by providing a guarantee for capital investment
and loans.

 So, if the capital investment is not available than it provides the guarantee and then IBRD provides loans for
promotional activities on specific conditions.