Shape Effects
The final category within the Add button is a special set of effects that apply only to shape layers. They’re able to affect the vector data of paths, which keeps your shapes in full quality (unlike regular effects, which all operate on pixels). Spoiler alert: they’re awesome.
Merge Paths
Merge Paths is an extremely useful tool for combining, intersecting, and excluding multiple shapes. A simple case use for Merge Paths is rendering a donut: You could have one ellipse for the dough, and second one that cuts a hole out of the center.
Merge Paths is usually added to a layer or group that contains at least two intersecting shapes. ...
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