Which wood cutting tool is best to cut circles?
It just depends on the size of the circles. A hole saw must can be used to make circles, but you'd need to use a drill press to start it and you'd need to remove the center pilot drill. If you're after a larger circle you might need to use a wood lathe. Sometimes, for a very large circle, people will use a bandsaw to rough out the dimension then use the lathe to make it exact.
I prefer a jig saw myself
A chisel is an important wood working tool for cutting and shaping wood. It is a flat, thick piece of steel which has one end ground to an sharp bevel to form a cutting edge. It usually has a wooden or plastic handle which is sometimes reinforced if the particular chisel is designed for use with a mallet.