Of exams, there are two types: the formative and the summative.
The formative type functions as a student's learning tool. It allows the student to do a bit of self-learning and evaluation as to the progress made in learning so far. These exams are usually simple and occasionally even fun -- if you can call pop quizzes and essay writing fun. They may also take the form of 'alternative assessments' or self-directed projects that make use of the skills and content learnt and mashes them up in the crafting of a non-traditional artefact for assessment: a video, a poster, or something as creative and colourful. There is more flexibility in submission deadlines, consultation and advice from the assessor, and collaboration with peers. As such, they are low-stakes assessments because the objective is skewed more towards the learning process than the assessment results.
The summative type is the assessment of what the student has already learned, not what the student is in the process of learning. In order to gauge the student's learning fairly, the assessment would put the student in an unfamiliar position or situation and see how the student is able to draw on the skills and knowledge already acquired and use them to effectively carry out the assessment requirements.
In our tribal past, a novice may be learning from a master how to make a drum or a canoe. During the instruction period, the novice may be called upon to assist in various parts of the process and observe others. There may be mini-tests along the way, but the results would have little serious consequence to the final product. The master would always be there to praise competent work or repair any damage done, but the learning experience would have served its purpose. These tests are formative in nature.
The summative assessment occurs when the novice has to build the whole item from scratch for the first time. With the learning scaffolds removed, the novice would encounter real life obstacles, difficulties, or unforseen circumstances that could not have been prepared for beforehand (the master made it look so easy!). The novice may have the knowledge and skill, but to do well must also be able to utilize some personal ingenuity, insight, quick critical thinking and improvise a solution on the spot. Here the assessment is high-stakes as the end-user (not the master!) depends on the quality of the work produced. Good work results in a satisfied customer, poor work results in a waste of time, resources and probably a reprimand and retraining for the goofball who screwed up.
Jumping back to the present age, assessments have become a source of unnecessary stress for the students of today. That's because assessments perform neither formative nor summative functions, but rather have become a horrid hybrid of both. What should be formative assessments are over-studied and over-prepared for as what should be low stakes have become high stakes. The actual high-stakes final exams (of which there aren't really that many) are taken as formative in nature as every student feels inadequate taking them without being hand-held all the way to the last full-stop.
If every assessment is taken as high stakes, and if every result is viewed as more important than the process, little real learning is taking place. If the assessment meant to be summative is prepared for like a formative one, there is little opportunity for practicing independent thought. What we get is a generation of students that don't know how to tackle questions unless they are told the answers beforehand. The problem is, we can't teach them all the answers because no one knows all the questions.
Our efforts to teach to the exam may bring results, but also undue stress to everyone involved and a very warped picture of what exams are and what they are meant to accomplish. Let's go back to when formative assessments were easy and the answers accessible to a diligent student; and summative assessments challenged a student with unfamiliar, off-the-wall questions that cannot be easily prepared for. Less stress, more learning, better results all round.