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It is the second drop-down menu in the controls and sports a microphone icon. Select your USB analog converter in the source menu. It is the first drop-down menu in the controls. The first thing you need to do in Audacity is ensure that when you open it up it's going to use the right hardware to record from and that the project rate matches what you selected in the steps above.
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In my case, it's set to 2-channel, 16-bit, 48000Hz.
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