this is the crowding out effect. when interest rate increases, the firms that borrow money from the banks are generally need to pay more for their borrowing. the firms would like to cut the costs to finance the increasing interest and principal repayment. therefore, probably the firms would like to decrease the number of labours, leads to increase unemplyment rate.

increase interest rate is one kind of deflationary fiscal policy, which can deal with inflation. the government pushed up the interest rate, and tried to reduce inflation, however, they did not take all the effects into account, therefore, that's why unemplyment rate increased

如果说是为了对付通货膨胀而提高利率，那么政府的目的就是在于紧缩货币供给量以抵消较高的通货膨胀。这是根据数量方程式得出的必然结论。（MV=PY）

在短期中，菲利普斯曲线说明了通货膨胀与失业存在负相关关系，如果政府的目的在于降低通货膨胀，那么它的任何政策必然引起失业的增加。（除了降低通货膨胀预期的办法，据说这是最好的办法。）

所以本文的推理应该是里根政府提高利率，以紧缩货币供给量，从而期望降低通货膨胀，引起失业率上升。

但是并不是说所有的提高利率都会造成失业率上升。

monetary policy consist of two parts, one if interest rate, the other one is money supply. they are intrarelative, increase interest rate, citizens consider that banking would be a good investment, therefore, banking in bank will increase, leads to decrease money supply in the market.

in here, "里根政府提高利率，以紧缩货币供给量，从而期望降低通货膨胀，引起失业率上升" probably, you miss one step

提高利率,那么投资减少,就业机会必然会减少的.