>>> The 700k population of students perhaps doesn't fluctuate much, but the
>>> difficulty of the questions surely does. But how to control for that?
>>
>> Isn't that a perfect reason to have a fixed % of people getting each
>> grade?
>
> Depends on whether you need an absolute measurement of skill/knowledge or
> a relative measurement.

If the distribution in skill/knowledge of the students is fluctuating 
less than the difficulty of the questions, it will give you a more 
accurate absolute measure (if the alternative is to give everyone grades 
based on the number of questions they get right).

Given there are only a handful of questions in an exam, and hundreds of 
thousands of students taking them (and hundreds of thousands of 
teachers), I'd say it's way more likely the distribution of question 
difficulty varies from year to year than that of the students' skill.

Anyway I'd suggest that the main use of school exam grades is to secure 
a place at a college or university, so a relative measure is probably 
all that's needed.

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