If the formula = ($x$7 + x8) is copied from cell (a1) to a (a5) - 4 rows lower, what happens?

Since the first cell is locked, wherever you copied it, the cell remains the same. However, the second cell if copied from one cell to another, in this case 4 cells below, the numerical value will be added 4.

Thus, the formula in cell A5 will be like this: = $X$7+X12.