When you open a 12 X 12 paper, you will see that the size is 3600 X 3600.  This is the number of pixels.  If you take 300 pixels and times it by 12 inches, you get the 3600.

This is important to know when you want to resize a paper, page or element.

While the paper is is your folder, Right Click on it and choose Properties.

Then choose Summery.

See how it says 3600 pixels for Width and 3600 pixels for Height?  This means, this page is 12 inches by 12 inches as described above.

Go ahead and make your 12 by 12 layout.

You will then get this option box.

Let's start at the top and work our way down.

Under Pixel Dimensions, make sure your Width and Height are at 100 and to the right choose Percent.  Next make sure under Print Size; Width and Height is set to Inches.  And your resolution is set to Pixels/Inch.  See how it says 12 inches X 12 inches at 300 pixels/inch? 

Next is Resample Using:  I always use Bicubic because I heard it's the clearer of the options.  One day I'll have to fiddle with it :0)

Then make sure Lock Aspect Ratio is checked and you have it set to 1 to 1.

Finally you have Resize all Layers.  Because your layout is all finished you want to have this Checked.  If you were only going to resize 1 layer, you would uncheck this box.

Now that all your settings are done, go up to Print Size.  Change the 12's to 8's and hit OK.