The OS that I am using is Windows 7, and the PowerShell version that is installed here is 2.0. Is it possible for me to upgrade it to version 3.0 or 4.0?
Because there are cmdlets that version 2.0 can't recognize.
Download and install from http://www.microsoft.com/en-us/download/details.aspx?id=34595. You need Windows 7 SP1 though.
It's worth keeping in mind that PowerShell 3 on Windows 7 does not have all the cmdlets as PowerShell 3 on Windows 8. So you may still encounter cmdlets that are not present on your system.