Im a bit confused in the use of the page layout view in Microsoft Word. I have correctly set the paper size to letter(8.5"*11"), but when I place a piece of paper on my monitor the size and dimensions of the paper do not match the screen at 100% zoom. the paper on screen is much larger than the real paper. And if I choose less zoom (90%) to match the width of the real paper to the one on screen, the paper on screen is a bit longer than the real paper.

The sizes are not meant to match up.

Actually, Windows doesn't even have the facilities to take monitor size into account automatically. You can set the dpi manually to a custom value, but that will break many apps that depend on the WIndows default of 96.