<!-- 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.

stream = aws_stack.create_kinesis_stream(self.TEST_STREAM_KINESIS_API_GW)
        stream.wait_for()
        
        result = self.connect_api_gateway_to_kinesis('test_gateway1', self.TEST_STREAM_KINESIS_API_GW)
        
        test_data = {'records': [
            {'data': '{"foo": "bar1"}'},
            {'data': '{"foo": "bar2"}'},
            {'data': '{"foo": "bar3"}'}
        ]}
        url = gateway_request_url(
            api_id=result['id'], stage_name=self.TEST_STAGE_NAME, path=self.API_PATH_DATA_INBOUND)
        
        result = requests.get(url)
        result = json.loads(to_str(result.content))
        self.assertIn('StreamNames', result)
        
        result = requests.post(url, data=json.dumps(test_data))
        result = json.loads(to_str(result.content))
        self.assertEqual(result['FailedRecordCount'], 0)
        self.assertEqual(len(result['Records']), len(test_data['records']))
        
        kinesis = aws_stack.connect_to_service('kinesis')
        kinesis.delete_stream(StreamName=self.TEST_STREAM_KINESIS_API_GW)
    def test_api_gateway_sqs_integration_with_event_source(self):