A big reason is that it's quicker and more objective to grade, making the heavy workload of teachers a little easier to shoulder.
I don't completely agree that multiple-choice questions can't test real knowledge. It is possible to write multiple-choice questions that require deep thinking and problem solving to select the correct answer (modulo a 25% chance of getting it right with a guess.)
It's true that MC questions can't evaluate the problem-solving process. You can't see how the student thought or worked through the problem unless you have them write things out. But again, that's a tradeoff with the time it takes to evaluate the students' responses.
I don't completely agree that multiple-choice questions can't test real knowledge. It is possible to write multiple-choice questions that require deep thinking and problem solving to select the correct answer (modulo a 25% chance of getting it right with a guess.)
It's true that MC questions can't evaluate the problem-solving process. You can't see how the student thought or worked through the problem unless you have them write things out. But again, that's a tradeoff with the time it takes to evaluate the students' responses.