Circular dichroism and optical activity are well known manifestations of optical activity. In recent years several novel types of optical activity have been observed. An achiral system bathed in an intense beam of circularly polarized light shows chiral behaviour which can be detected as circular dichroism or optical rotation. In another type of induced circular dichroism, a chiral solvent is used to induce chirality. Theories of natural and induced optical activity are reviewed within a unified framework using quantum electrodynamics.