<!-- Love localstack? Please consider supporting our collective:
👉  https://opencollective.com/localstack/donate -->

# 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.

queue_name = 'queue-%s' % short_uid()
        queue_url = aws_stack.create_sqs_queue(queue_name)['QueueUrl']
        
        result = connect_api_gateway_to_sqs(
            'test_gateway4', stage_name=self.TEST_STAGE_NAME,
            queue_arn=queue_name, path=self.API_PATH_DATA_INBOUND)
        
        self.create_lambda_function(self.TEST_LAMBDA_SQS_HANDLER_NAME)
        event_source_data = {
            'FunctionName': self.TEST_LAMBDA_SQS_HANDLER_NAME,
            'EventSourceArn': aws_stack.sqs_queue_arn(queue_name),
            'Enabled': True
        }
        add_event_source(event_source_data)
        
        test_data = {'spam': 'eggs & beans'}
        url = gateway_request_url(
            api_id=result['id'], stage_name=self.TEST_STAGE_NAME, path=self.API_PATH_DATA_INBOUND)
        result = requests.post(url, data=json.dumps(test_data))
        self.assertEqual(result.status_code, 200)
        parsed_json = xmltodict.parse(result.content)
        result = parsed_json['SendMessageResponse']['SendMessageResult']
        body_md5 = result['MD5OfMessageBody']
        self.assertEqual(body_md5, 'b639f52308afd65866c86f274c59033f')
        
        sqs_client = aws_stack.connect_to_service('sqs')
        sqs_client.delete_queue(QueueUrl=queue_url)
        lambda_client = aws_stack.connect_to_service('lambda')
        lambda_client.delete_function(FunctionName=self.TEST_LAMBDA_SQS_HANDLER_NAME)
    def test_api_gateway_sqs_integration(self):