Hi,
A PM should have the liberty / flexibility to choose between a Predictive V/s Iterative Life cycle. However his decision depends on:
1 - The level of detail known about the final product / service / result that is to be achieved by his performing organization.
2 - Performing organization's confidence level in the approach to be adopted / followed in order to achieve the desired product / service / result.
A predictive life cycle should be applied where the PM is confident that following a particular approach will result in a desired product / service. The PM is basically able to predict at the project start / even earlier that a particular approach will enable his organization achieve the project objective / desired product / service / result.
On the other hand an Iterative cycle will be applied when there isn't a surety that following a particular approach could result in a desired product / result, OR when the actual product itself is evolving. Under such circumstances, to reduce the liability, the PM should follow an iterative life cycle. Results from each iteration will then determine whether a particular approach / product needs to be pursued or changes are required to the approach / final product functionality.
When a Scope change occurs in a project following a predictive life cycle, well you incorporate it (if approved) but there isn't a change in your original approach to achieving the final project objective / product / service / result.
On the other hand on a project following an iterative life cycle, you are basically performing various iterations till you are satisfied with the achieved product / service / result.
Hope to have clarified your query.