Photoshop elements doesn't normally allow users to open, close or edit layer groups (layer sets), which are usually made in the full version of photoshop ( i.e. cs6 or cc2014)
If you notice the pencil icon with slash to the right of the folder name in the layers panel means that layer group is not editable in pse 7.
If you want to edit the layer groups you might use this action from over on elements village:
Opening layer sets in PSE7 - Elements Village
Or check out Elements+