Does FreeSync only fixes the problems of screen tearing or it also help remove ghosting, smearing, blurring problems in monitor?
It's just there to reduce tearing. All it does is vary the refresh rate to match the frame rate. This means you don't get a new frame while still drawing the last one, which is what causes tearing.
It can sometimes help with visible stuttering compared to traditional vsync. If your frame rate is less than your refresh rate, vsync will sometimes hold a frame back for two refresh cycles which helps with tearing, but you will perceive it as a micro-stutter. Freesync or Gsync will display frames as they are rendered without sticking to a rigid "schedule," up to the monitor's maximum refresh rate, which prevents tearing without the stutter.
The response time numbers from manufacturers are mostly BS, cherry picked from unrealistic testing conditions. A couple times on LTT they have talked about VESA's new clear motion standard which is meant to counteract this, but afaik it's not been rolled out yet. If you care about ghosting and other response time-related artifacts, for the time being you'll have to look at reviews.
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