Prospective travelers to that fictitious country and many real ones often ask that question, with good reason. A slip as minor as a sip of tap water in Mexico can lead to days of misery. On the other hand, bottled water often costs more than wine, so buying it when you really don't need it is a big waste of money. And although you can find quite a few sources of information, the final decision is up to you.
Whenever you're visiting a country for the first time, your first source of information on general health matters should be the Centers for Disease Control and Prevention (CDC), the U.S. government agency that deals with such things. Log on to its "Travelers' Health" website at wwwnc.cdc.gov/travel/, select the country you plan to visit, and scroll down the display to the "Staying Healthy During Your Trip" topic, where you'll find the "Be Careful about Food and Water" section. There, along with some broad recommendations made about every country in the world, you'll find the item on drinking water.
-- In much of the world, the recommendation is "Drink only bottled or boiled water, or carbonated (bubbly) drinks in cans or bottles. Avoid tap water, fountain drinks and ice cubes. If this is not possible, learn how to make water safer to drink."
-- Additional warnings for these countries typically advise, "Do not eat food purchased from street vendors; make sure food is fully cooked, and avoid dairy products, unless you know they have been pasteurized."
-- For most of Western Europe and such other advanced countries as Australia, Japan and New Zealand, however, the site omits any specific recommendation about water, meaning that CDC thinks the drinking water is OK.
The site also includes a lot of other information about travelers' health. And although much of it is pretty much of the "any idiot" variety ("avoid insect bites" and such), you will find some of the warnings well worth your attention. Note especially any reports of contagious disease outbreaks.
In my experience, CDC errs a bit on the side of caution. Even in some places where it says, "avoid the tap water," on the advice of experienced travelers and resident expats I've occasionally used the tap water without any problems. That tends to be the case in some big cities in countries where you wouldn't drink the water in smaller towns or the countryside. But CDC doesn't make such distinctions.
As a cross check, you can also consult one or two guidebooks, which typically have something to say about drinking water and ice cubes. Fodor's and Frommer's generally track with CDC recommendations.
If you're traveling in a country with questionable water, keep in mind that you have to avoid exposure to local water in all of its forms. That means no ice cubes (other than in high-end hotels that promise use of bottled water in their ice-making), brushing your teeth with bottled water, and avoiding taking in any water when you shower. Yes, it's often a fuss, but a bad bout of diarrhea is much more of a fuss.
On the other hand, keep in mind that the hotels and restaurants have a vested interest in pushing the bottled water on you whether you need it or not. Their mantra seems to be, in Cole Porter's words," Never give anything away that you can sell." Even in countries where the tap water is perfectly OK, the default seems to be to try to sell you the bottled stuff.
In all my travels, I've had only one serious case of water-based sickness -- in Jerusalem. But that once was enough; when in doubt, go for the Evian, Vichy, San Pellegrino, or, as someone I know calls it, "Prairie Water."