The correct answer to this open question is the following.
The relationship between literature and our identity is that through literature, authors write about topics based on the culture, belief systems, and traditions of a country. All of these are important parts of the identity of a nation.
Reading a novel shapes our identity in that authors write about history, traditions from the past, the way people used to live, and how they forged the nation. And that helps readers to learn about their roots, their origins, how the identity of their country was forged on the battlefields, or throughout history.
Identity refers to the values, traditions, and visions of a nation.
This means that every nation has been the result of the culture, customs, values, history, and belief systems of its people throughout the years. And these elements are reflected in literature, as many authors research to write their books.