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# Type of request: This is a ...

[ ] bug report
[x] feature request

# Detailed description

The API Gateway response body only accepts strings. To transfer binary data, it needs to be base64 encoded, inserted as a string in the response body and the flag ´isBase64Encoded´ must be set. Once this is done API Gateway will base64 decode the response and return the binary content to the requester.

## Expected behavior

When setting the isBase64Encoded flag, the response is base64 decoded before being returned from API Gateway.

## Actual behavior

Setting the isBase64Encoded flag has no effect, the response body will contain the base64 encoded string instead of binary data.

# Steps to reproduce

## Command used to start LocalStack

Docker compose config:
```
version: '2.1'

services:
  docker-host:
    image: qoomon/docker-host:2.5.0
    cap_add: [ 'NET_ADMIN', 'NET_RAW' ]
    mem_limit: 20M
    restart: on-failure
  localstack:
    image: localstack/localstack:0.12.10
    depends_on: [ docker-host ]
    ports:
      - "4566:4566"
      - "4571:4571"
    environment:
      - DOCKER_HOST=unix:///var/run/docker.sock
      - HOST_TMP_FOLDER=${TMPDIR}
      - DATA_DIR=${TMPDIR}/data
      - DEFAULT_REGION=eu-west-1
      - LAMBDA_REMOTE_DOCKER=0
      - LAMBDA_EXECUTOR=docker-reuse
      - LAMBDA_DOCKER_NETWORK=scripts_default
      - AWS_CBOR_DISABLE=true
    volumes:
      - "${TMPDIR:-/tmp/localstack}:/tmp/localstack"
      - "/var/run/docker.sock:/var/run/docker.sock"

```

## Client code (AWS SDK code snippet, or sequence of "awslocal" commands)

Need to set up a Lambda Rest API that returns a base64 encoded string, where the flag `isBase64Encoded` is set. The returned response should reflect the base64 decoded version of the string.

if uri.endswith('states:action/StartExecution'):
                action = 'StartExecution'
            decoded_data = data.decode()
            payload = {}
            if 'stateMachineArn' in decoded_data and 'input' in decoded_data:
                payload = json.loads(decoded_data)
            elif APPLICATION_JSON in integration.get('requestTemplates', {}):
                template = integration['requestTemplates'][APPLICATION_JSON]
                payload = aws_stack.render_velocity_template(template, data, as_json=True)
            client = aws_stack.connect_to_service('stepfunctions')
            kwargs = {'name': payload['name']} if 'name' in payload else {}
            result = client.start_execution(stateMachineArn=payload['stateMachineArn'],
                            input=payload['input'], **kwargs)
            response = requests_response(
                content={
                    'executionArn': result['executionArn'],
                    'startDate': str(result['startDate'])
                },
                headers=aws_stack.mock_aws_request_headers()
            )
            response.headers['content-type'] = APPLICATION_JSON
            return response
        elif 's3:path/' in uri and method == 'GET':
            s3 = aws_stack.connect_to_service('s3')
            uri_match = re.match(TARGET_REGEX_S3_URI, uri)
            if uri_match:
                bucket, object_key = uri_match.group('bucket', 'object')
                LOG.debug('Getting request for bucket %s object %s', bucket, object_key)
                try:
                    object = s3.get_object(Bucket=bucket, Key=object_key)