In this tutorial I will show you an ABSOLUTELY FREE way to record the system audio from your computer (not microphone) using Quicktime and a free program called Soundflower. This is useful for screen recordings that you need to capture your computer's audio with, or legally recording uncopyrighted audio. So let's take a look...
(I'm not as familiar with WIndows computers, but I believe there is another program called "Jack" that should do pretty much the same thing. But I'm not 100% sure.)
Step 1: System Preferences
If you notice, there's nothing in the input about receiving the computer audio, and nothing in the output about outputting the computer audio. But don't worry, we can fix that.
Step 2: Soundflower
It can be downloaded from here.
Download and install this program by opening the .dmg file and following the on-screen instructions.
Step 3: Making It Work
Make sure your in the "Output" section, and click on "Soundflower (2ch)." Now your computer is outputting all of it's audio through the Soundflower (2ch) extension. (The only downside is that you will not be able to hear audio through your speakers as long as this is selected.)
Now open Quicktime Player and click on File>New Screen Recording. Click the little arrow on the side of the Quicktime window. Under the microphone section, click on "Soundflower (2ch)."
If you would rather record ONLY audio and not the screen, click File>New Audio Recording, and do the same thing.
Now click the record button and record your computer's audio!
When you're done and you want to hear audio through your speakers again, go back to System Preferences>Sound>Output, and click on "Internal Speakers." Your audio will now play through your internal speakers again.
Have fun with this!