Final answer:
The statement that majority rule can always produce a single preferred outcome with more than two choices is false due to Condorcet's paradox. It is also false that modernization theory has established a clear causal link between economic growth and democratic institutions, as exceptions to this supposed trend exist.
Step-by-step explanation:
The statement is false: Majority rule can fail to produce a single preferred outcome when there are more than two choices. This is known as Condorcet's paradox in social choice theory, which states that majority preferences can become cyclical and hence not transitive when three or more options are present. This means that even if one option wins over another in a series of pair-wise contests, it may still lose to a third option, making it impossible to determine a clear winner based solely on majority rule.
Regarding modernization theory, the statement is also false. While modernization theory suggests that as societies develop economically, they are more likely to adopt democratic institutions, the causal link is not clearly established. There are numerous examples of economically prosperous states that have not followed this trajectory, indicating that economic growth is not a guaranteed catalyst for the development of democratic institutions.