Farm_boy, is "Jenny" a non-native speaker of English? In my experience, the students who have (and use) dictionaries during class are not fluent in English (There are plenty of students who are native speakers of English who should be using a dictionary as well, but I digress...).
I agree: when a quiz is testing for comprehension of certain terminology/vocabulary, using a dictionary defeats the purpose of the assessment.
I agree too. That reminds me of when I'll have multiple choice exam questions along the lines of "Which of the following is an example of ~term from chapter~". And during the test, a student will come and ask me "What does ~term from chapter~ mean?". Uh, that is what I am testing you on!