The response of an extended periodic system to a homogeneous field (of wave-vector q = 0) cannot be obtained from a q = 0 time-dependent density functional theory (TDDFT) calculation, because the Runge-Gross theorem does not apply. Time-dependent current-density functional theory is needed and demonstrates that one key ingredient missing from TDDFT is the macroscopic current. In the low-frequency limit, in certain cases, density polarization functional theory is recovered and a formally exact expression for the polarization functional is given.PACS numbers: 71.15. Mb,78.20.Ci, Density functional theory[1, 2] is a standard approach for calculating ground-state properties of solids [3] and molecules [4]. Time-dependent density functional theory (TDDFT) is an extension of the ground-state formalism based on the Runge-Gross theorem [5]; this establishes a one-to-one correspondence between time-dependent densities and time-dependent one-body potentials. When a time-dependent electric field is applied to a system, this formalism provides a route to its optical response [6]. The response equations of TDDFT have been encoded in standard quantum chemical packages [7], and results for molecules are appearing (see Ref.[8] for many examples). As in the ground-state case, the accuracy depends on the quality of the approximate functional used.There is great interest in applying the same technique to extended systems. While these can be treated well within existing wavefunction technology, using, e.g., the GW approximation and then solving the BetheSalpeter equation for the optical response[9], the allure of a TDDFT approach is its far lower computational cost. Calculations already show that excitonic effects appear to be treatable by going beyond the usual local and semi-local approximations of standard DFT calculations [10,11].There is also a version of the time-dependent theory, called time-dependent current-density functional theory (TDCDFT), that uses the current-density as the basic variable: As the choice of variable (charge density versus current density) appears a matter of convenience, TDCDFT and TDDFT appear to be equivalent (for non-magnetic systems). The time-dependent exchange-correlation potential has been argued to be more amenable to local and semilocal approximation in terms of the current-density [12] and this framework has been used in recent response calculations of solids [13,14] and conjugated polymers [15]. Initial work towards a matrix formulation of the current-density response equations has been presented in Ref. [16].In this paper, we demonstrate a difference in principle between the two approaches when applied to bulk solids. The basic theorems of DFT, ground-state or timedependent, are proven for finite electronic systems (i.e. systems with a boundary). We consider the response of periodic systems (such as the bulk of an insulator or metal) to time-varying electric fields which have a spatially uniform component. We show that TDDFT fails in this case: there is no one-to-one correspondence between ...