Standardized tests are good tools, but they are not perfect. The trouble comes when instructors teach students how to pass tests rather than teaching the subject. If the student learns the subject, passing the test will come naturally. The best way to test a student's knowledge is to have him produce something with it. It is great to be able to pass a test, but would you hire a networking engineer who couldn't configure a home network? I have actually known people like this. I suspect they have superior memorization and verbal skills, but they have no inclination in their chosen fields. Written tests like standardized tests are necessary, but they are not sufficient.

There are critics to standardized testing, because some people just are not good under the pressure and it isn't necessarily an accurate reflection of their aptitude as students. However, one of the biggest advantages of standardized testing is the ability to stream line results among a very large group.
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