When looking north, you see stars

O move in arcs from east to west.

appear to move in circles.

Omoving diagonally upward.

Omoving diagonally downward.

When looking north, you see stars appear to move in circles.

Explanation:

The motion of stars in northern hemisphere shows the circular motion that follows the path around the Polaris. As it takes 24 hours to complete one full circle, so during a night less than 12 hour, we see only certain part of path i. e. stars moving in an arc. And if you're facing north, they are moving from west to east. So depending upon the time of observation the stars may take the path of an arc or the full circle.