Ubuntu: Record 'What you hear' on Ubuntu with Audacity

How do I record what I hear in Ubuntu? here's how...
Audacity is a free, easy-to-use audio editor and recorder for Windows, Mac OS X, GNU/Linux and other operating systems. You can use Audacity to:

• Record live audio.
• Convert tapes and records into digital recordings or CDs.
• Edit Ogg Vorbis, MP3, WAV or AIFF sound files.
• Cut, copy, splice or mix sounds together.
• Change the speed or pitch of a recording.

PulseAudio Volume Control (pavucontrol) is a simple mixer for the PulseAudio sound server. In contrast to classic mixer tools this one allows you to control both the volume of hardware devices and of each playback stream separately. 


Here's how to use both to record what you hear from your PC...