When I resize my image it reverts to full size when I layer it?

I'm working with a newly installed photoshop elements 12 on a Mac.  When I resize an image (for example 1" x 2") and layer it onto a blank sheet (8.5 x 11in) in reverts back to full size and covers the entire base layer.  I've tried changing the "view" to print size but it doesn't stick when I layer it.  Is there something I'm missing in the settings?  Do I need to reinstall Photoshop?

Have a look at the following discussion:
http://www.elementsvillage.com/forums/showthread.php?t=82355&highlight=resize
I think what you are seeing is the result of dragging a file from the photobin to the workspace. You'll find other ways to add your layers to your project.
Note that that behaviour has been changed in PSE13.

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