Free Practice Questions for CISI ICWIM Exam

A normal product is one for which demand increases when consumer income rises, assuming other factors remain unchanged. When consumers have higher disposable income, they are typically willing and able to buy more units of normal goods at any given price. This change in purchasing power affects the quantity demanded across the entire range of prices, not just at one price point. In demand and supply analysis, that is represented as a shift of the whole demand curve, rather than a movement along the same curve. The correct direction is to the right, indicating higher demand at each price level. A shift to the left would describe a fall in demand, which would be associated with reduced incomes for normal goods, or rising incomes for inferior goods. The curve does not “begin to curve upwards” because the shape of the demand curve is not changed simply because income rises; it is the position of the curve that changes. This distinction between movement along the curve due to price changes and a shift caused by income changes is a common exam trap.

An occupational pension scheme is arranged through the employer and is a workplace pension benefit for employees. A key advantage, compared with many personal arrangements, is that the employer typically contributes to the scheme alongside the employee. This employer contribution increases the total amount saved for retirement and is often viewed as a valuable part of remuneration. Contributions and withdrawals are not fully tax free; pension tax treatment involves rules on tax relief on contributions and taxation of benefits when taken, so option A is incorrect. Knowing the level of retirement income applies specifically to defined benefit schemes, not to occupational schemes in general, because many occupational schemes are defined contribution and the outcome depends on contributions, investment performance, charges, and retirement choices. Employees also do not usually set up the scheme themselves; the employer establishes it, and while employees may have some investment choices in defined contribution schemes, that is not the defining advantage. Therefore, the consistent advantage across occupational schemes is that the employer contributes to the overall cost.