A digital system consists of two types of circuits: combinational circuits and sequential circuits.

1. Combinational Circuits:
Combinational circuits are digital circuits where the output depends solely on the current input values. They do not have any internal memory or feedback. The output is determined by the combination of the input values and the logic gates used in the circuit. Combinational circuits are designed to perform specific Boolean functions, such as addition, subtraction, multiplication, etc. Examples of combinational circuits include logic gates (AND, OR, NOT, etc.), multiplexers, demultiplexers, and arithmetic logic units (ALUs).

2. Sequential Circuits:
Sequential circuits are digital circuits where the output depends not only on the current input values but also on the past input values and the internal state of the circuit. They have memory elements (flip-flops) that store information and feedback connections that allow the circuit to remember previous inputs. Sequential circuits are used to create circuits with memory, such as counters, registers, and memory units. These circuits are designed to perform tasks that require sequential logic, such as data storage, data retrieval, and data processing.

3. Total number of circuit types:
Therefore, the digital system consists of two types of circuits: combinational circuits and sequential circuits. Hence, the correct answer is option 'A', which states that a digital system consists of 2 types of circuits.