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A thick brownish fluid secreted by the liver, bile is produced from cholesterol through the action of an enzyme and with the help of vitamin C. In most vertebrates, it's stored in the gall bladder and emptied into the small intestine as food passes through. Bile salts assist the digestion of fats.
A high level of vitamin C in the diet helps to promote bile production, which, in turn, assists in the reduction of cholesterol levels.
A fat-free diet is undesirable because it doesn't stimulate bile flow and, as a result of this, sediments may form which can promote the development of gallstones.