A competitive examination is an examination where candidates are ranked according to their grades. If the examination is open for n positions, then the first n candidates in ranks pass, the others are rejected.
They are used as entrance examinations for university and college admissions or to secondary schools. Another types are civil service examinations, required for positions in the public sector; the U.S. Foreign Service Exam, and the United Nations Competitive Examination.
Competitive examinations are considered an egalitarian way of choosing worthy applicants without risking influence peddling, bias or other concerns.