IN THIS MODIFICATION, you'll see the real value in having a separate shadow object. When shadows fall they react to different receiving surfaces in different ways. The distance from the object and the intensity of light both have an effect on the characteristics of the shadow.
Example: Introduce a second surface to receive the shadow

In this diagram, we've introduced a second surface to the mix. Obviously this seems wrong because the shadow stops where this surface appears. It looks fake.
If we move the surface behind the overall shadow, it still looks fake -- or else the "stripe" is painted on the background rather than being a separate surface. That's okay, of course, if that's what you want. However, in order to look like a unique surface, logically the shadow would act differently on the yellow than on the gray.
In order to raise the yellow stripe off the background -- making it appear as if it's a separate surface, we'll need another shadow. So select your shadow layer in the layers palette and use the Command/J (Control/J) to duplicate it.
To visually reinforce our illusion, move the yellow stripe layer BETWEEN the shadow layers.

Now we'll modify both shadows to reinforce the dimensions in space. We'll move the ribbon closer to the white object simply by moving the shadow, and removing all shadow that does not cross it. (We'll call this shadow the "Shad for Bar")
* Select the "Shad for Bar" layer in the Layers Palette, tap the letter V and using the arrow keys, move the shadow UP 6 pixels and LEFT 6 pixels. That's about half of the distance we offset the original shadow

* Command/click (Control/click) the Yellow Stripe layer to select it.
(Racing ants will confirm its selection)
* Choose: Select > Inverse
* Click on the "Shad for Bar" layer to make it the target layer,
then Delete to remove all the shadow on that layer that does NOT run across the yellow stripe. (See active layer in diagram above, to see the clipped shadow.)

Now, click the original shadow layer to activate it, and use the Opacity slider to crank the transparency down to about 35% or so.
Notice that now you have the illusion of the bar being closer to the white object than the gray background.
With the original shadow layer still the selected layer, once again tap the letter V (Move Tool) and use your arrow keys to move the original shadow further away. I used RIGHT 10 pixels and DOWN 10 pixels here.
Notice that the further offset, and the lighter the shadow gets, the further away the background seems. This is because shadows get lighter as they move further away from the object casting the shadow.
NEXT: We'll fine-tune our shadows to make them look more realistic
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from the Editor:
I was delighted that day back in 1989 when Peggy Killburn called to ask if I could handle one more speaker in my "Great Graphics Tips & Tricks" session scheduled for the 1990 Macworld Expo. "Yes" was my response to her request to add Russell Brown to my panel. After all, we loved Adobe's young "Illustrator" program, and were quite anxious to try out their upcoming new product called "Photoshop." After seeing his demo, I was convinced Photoshop would be big. So the next month we added "Photoshop Tips & Tricks" to our regular DTG Magazine uploads to Compuserve, GEnie and AOL. The rest is history.
I only regret that I didn't trademark the name.
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Editor / Publisher: Photoshop Tips & Tricks, DTG Magazine.